Sonim Reports 34% Increase in FY2023 Revenue, to $93.6 Million, Significant Expansion Momentum in New Addressable Markets
- 34% increase in net revenues to $93.6 million for 2023
- Positive adjusted EBITDA of $4.0 million in 2023
- Secured 13 new carrier awards, expanding into larger markets and entering Europe
- Debt-free status with $9.4 million in cash and equivalents
- Decrease in Q4 revenue to $13.4 million
- Net loss of $1.4 million in Q4 2023
Insights
The expansion of Sonim Technologies' product portfolio and the acquisition of new carrier awards represent a strategic move to significantly increase the company's addressable market. The transition from a $400 million to a $52 billion market scope is indicative of the company's ambition to scale operations and diversify its product offerings. This shift is not only about entering new segments but also about geographic expansion, particularly into Europe, which can be a game-changer for the company's growth trajectory.
With the introduction of rugged smartphones, connected devices and consumer durables, Sonim is tapping into the evolving needs of mobile users who require durable and reliable devices. This strategy is likely to resonate with specific customer segments, such as industrial workers and outdoor enthusiasts, who prioritize device resilience. Furthermore, the company's ability to secure 13 new carrier awards is a testament to the market's reception of their product innovation and could potentially lead to a stronger foothold in these markets, especially with the exit of a major competitor in Europe.
However, it is important to monitor how these expansions will be executed, considering the substantial increase in the addressable market and the associated risks of overextending. The balance sheet indicates a relatively healthy financial position to support these growth initiatives, but the company will need to manage its operational expenses judiciously to maintain profitability.
Analyzing Sonim Technologies' financial results for the year ended December 31, 2023, reveals a substantial improvement in performance. A 34% increase in net revenues and a reduction in GAAP net loss from $14.1 million in 2022 to $90 thousand in 2023 are strong indicators of the company's operational efficiency and cost management. Additionally, achieving a positive adjusted EBITDA of $4.0 million, compared to the previous year's negative $9.9 million, reflects a significant turnaround in the company's financial health.
The improved gross profit margin, from 16.6% to 20.6%, suggests a more profitable product mix, likely due to the refreshed XP10 ultra-rugged smartphone's success. The reduction in R&D expenses points towards a more strategic approach to product development, which could be a factor in the company's improved financial outcomes. However, investors should be cautious about the fourth-quarter revenue dip, which may signal volatility in sales or market demand fluctuations.
While the company's expansion into new markets and product lines appears promising, it is important to evaluate the sustainability of these growth rates and the potential impact of new investments on future profitability. The company's debt-free status and cash reserves provide some buffer for investment in growth, but the management's execution of the expansion strategy will be critical to maintaining financial stability.
The legal landscape of expanding into new markets, especially across different regions like Europe and Australia, involves navigating complex regulatory environments. Sonim's strategic decision to enter these markets could be influenced by the legal vacuum created by the exit of a major rugged supplier in Europe. This presents an opportunity for Sonim to establish a strong presence, but it also requires careful consideration of the legal implications, such as compliance with local consumer protection laws, data privacy regulations and intellectual property rights.
Moreover, the company's positive financial results and the strategic plans for geographic and product expansion may attract investor interest and scrutiny. It is imperative for the company to ensure transparent communication regarding its financial measures, including non-GAAP metrics like adjusted EBITDA and to provide clear reconciliations to GAAP figures to maintain investor trust and comply with regulatory standards.
As Sonim continues to grow and diversify its offerings, it will be essential to keep a close eye on the legal frameworks governing its operations in new markets to mitigate potential legal risks and ensure smooth market entries.
Expanding Portfolio and Carrier Awards Boost Company's Addressable Market from
13 New Carrier Awards Set to Fuel 2024 Product Sales
New 2024 Product Launches Support Entry into Larger Rugged Pro, Connected Solutions and Consumer Markets, Geographic Expansion into Europe
San Diego, California--(Newsfile Corp. - March 27, 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 year ended December 31, 2023.
Full Year 2023 and Recent Highlights
- Net revenues increased by
34% year-over-year, to$93.6 million , up from$69.8 million in 2022 - GAAP net loss for the full year improved to
$90 thousand , down from a net loss of$14.1 million in 2022 - Adjusted EBITDA[†] was positive
$4.0 million for 2023, compared to negative$9.9 million for 2022 - Ended the year with cash and cash equivalents totaling
$9.4 million , accounts receivable at$25.3 million , and inventory valued at$6.5 million - Increased sales of Sonim's fully refreshed XP10 ultra-rugged 5G smartphone at tier-one carriers in the U.S. and Canada
- Entered much larger adjacent wireless internet and consumer durable addressable markets with new devices set to launch throughout 2024
- Secured six awards each for wireless internet solutions and rugged phones, plus one for consumer durables with new devices set to launch beginning 2024 in target geographical markets
- Commenced expansion plans to enter the European market, by establishing a geographic team focused on rugged mobility and connected solutions to fill the gap left by exiting competitors
Peter Liu, Sonim's Chief Executive Officer, said: "In 2023, Sonim achieved significant growth with a
[*] 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.
"The interest from carriers in our new products has been exceptional, with 13 product awards already announced for this year and a strong pipeline of additional opportunities in North America, Europe, and Australia. We believe that the launches for the new portfolio in the year ahead positions Sonim to become the preferred brand for reliable, durable devices in these larger markets.
"Furthermore, with the exit of the previous largest rugged supplier, Europe presents a significant opportunity for Sonim. We are actively working to qualify our newest products to fill this gap, targeting a major market opportunity for Sonim in rugged mobility and connected solutions."
Full Year 2023 Financial Results
Revenue for the full year 2023 was
Gross profit for the year ended December 31, 2023, was
Operating expenses for 2023 were
Net loss in 2023 was
"Sonim delivered three consecutive quarters of positive GAAP net income in 2023, resulting in an improvement to the net loss to
Fourth Quarter 2023 Financial Results
Revenue for the fourth quarter 2023 was
Gross profit for the fourth quarter was
Balance Sheet and Working Capital
Sonim ended 2023 with
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.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2023 and 2022
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
| December 31, 2023 | December 31, 2022 | |||||||||
| Assets | ||||||||||
| Cash and cash equivalents | $ | 9,397 | $ | 13,213 | ||||||
| Accounts receivable, net | 25,304 | 22,433 | ||||||||
| Non-trade receivable | 961 | 2,269 | ||||||||
| Inventory | 6,517 | 3,910 | ||||||||
| Prepaid expenses and other current assets | 1,608 | 1,807 | ||||||||
| Total current assets | 43,787 | 43,632 | ||||||||
| Property and equipment, net | 71 | 168 | ||||||||
| Right-of-use assets | 55 | 66 | ||||||||
| Contract fulfillment assets | 9,232 | 6,848 | ||||||||
| Other assets | 2,898 | 2,972 | ||||||||
| Total assets | $ | 56,043 | $ | 53,686 | ||||||
| Liabilities and stockholders' equity | ||||||||||
| Current portion of long-term debt | $ | — | $ | 147 | ||||||
| Accounts payable | 19,847 | 21,126 | ||||||||
| Accrued liabilities | 12,233 | 10,692 | ||||||||
| Current portion of lease liability | 55 | 66 | ||||||||
| Deferred revenue | 12 | 31 | ||||||||
| Total current liabilities | 32,147 | 32,062 | ||||||||
| Income tax payable | 1,528 | 1,429 | ||||||||
| Accrued severance | — | 150 | ||||||||
| Total liabilities | 33,675 | 33,641 | ||||||||
| Commitments and contingencies | ||||||||||
| Stockholders' equity | ||||||||||
| Common stock, | 43 | 41 | ||||||||
| Preferred stock, | — | — | ||||||||
| Additional paid-in capital | 272,285 | 269,874 | ||||||||
| Accumulated deficit | (249,960) | (249,870) | ||||||||
| Total stockholders' equity | 22,368 | 20,045 | ||||||||
| Total liabilities and stockholders' equity | $ | 56,043 | $ | 53,686 | ||||||
SONIM TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2023 and 2022
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
| . | 2023 | 2022 | |||||||
| Net revenues | $ | 93,632 | $ | 69,828 | |||||
| Cost of revenues | 74,308 | 58,205 | |||||||
| Gross profit | 19,324 | 11,623 | |||||||
| Operating expenses: | |||||||||
| Research and development | 1,772 | 7,973 | |||||||
| Sales and marketing | 8,768 | 7,274 | |||||||
| General and administrative | 8,271 | 10,666 | |||||||
| Total operating expenses | 18,811 | 25,913 | |||||||
| Net income (loss) from operations | 513 | (14,290) | |||||||
| Interest expense | (15) | (97) | |||||||
| Other income (expense), net | (214) | 484 | |||||||
| Net income (loss) before income taxes | 284 | (13,903) | |||||||
| Income tax expense | (374) | (184) | |||||||
| Net loss | $ | (90) | $ | (14,087) | |||||
| Net loss per share: | |||||||||
| Basic and diluted | $ | (0.00) | $ | (0.49) | |||||
| Weighted-average shares used in computing net loss per share: | |||||||||
| Basic and diluted | 41,689,386 | 28,889,111 | |||||||
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):
| Year Ended December 31, | |||||||
| 2023 | 2022 | ||||||
| Net loss | $ | (90) | $ | (14,087) | |||
| Depreciation and amortization | 2,206 | 2,375 | |||||
| Stock-based compensation | 1,496 | 1,551 | |||||
| Interest expense | 15 | 97 | |||||
| Income taxes | 374 | 184 | |||||
| Adjusted EBITDA | $ | 4,001 | $ | (9,880) | |||
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/203281
FAQ
What was Sonim Technologies' net revenue for 2023?
What was Sonim Technologies' adjusted EBITDA for 2023?
How many carrier awards did Sonim Technologies secure in 2023?
Did Sonim Technologies enter the European market in 2023?
What was Sonim Technologies' cash and equivalents balance at the end of 2023?
