Sonendo, Inc. Reports First Quarter 2024 Financial Results and Announces Strategic Reset Priorities
Sonendo, Inc. reported total revenue of $7.0 million for Q1 2024, surpassing guidance. They achieved a healthy console backlog, raised average procedure instrument selling price, and divested TDO software segment. The company announced a strategic reset focusing on commercial strategy, cash conservation, and margin expansion. Despite a GAAP operating loss of $10.2 million, non-GAAP operating loss improved. Sonendo raised their 2024 revenue guidance range to $29-$31 million.
Recorded total revenue of $7.0 million for Q1 2024, surpassing guidance
Achieved a healthy console backlog
Raised average procedure instrument selling price
Strategic reset focusing on commercial strategy, cash conservation, and margin expansion
Divested TDO software segment, resulting in a gain of $5.7 million
Improved non-GAAP operating loss compared to Q1 2023
Raised 2024 revenue guidance range to $29-$31 million
Total revenue decrease from $8.7 million in Q1 2023 to $7.0 million in Q1 2024
Decrease in GentleWave console and procedure instrument revenue
Impairment charges of long-lived assets recorded in cost of sales
Operating loss of $10.2 million for Q1 2024
Recent Highlights
-
Recorded total revenue of
$7.0 million $6.0 million -
Increased average procedure instrument selling price from
$71.60 $75.00 - Announced strategic reset of commercial and operational priorities including commercial strategy, cash conservation, and margin expansion
-
Divested TDO practice management software segment in March 2024, resulting in a gain of
$5.7 million -
First quarter GAAP gross margin of
28% ; non-GAAP gross margin of30% , an improvement of more than 700 basis points over the first quarter of 2023 -
First quarter GAAP operating loss of
$10.2 million $7.5 million 41% improvement over the first quarter of 2023 -
Raised 2024 full year revenue guidance range to
$29 million $31 million $28 million $30 million
“Building on our learnings over the past two years, Sonendo has embarked on a strategic reset to align key priorities for the long-term health of the Company,” said Bjarne Bergheim, President and Chief Executive Officer of Sonendo. “We have overhauled our go-to-market strategy, created efficiencies within the organization, and pivoted R&D efforts in order to drive commercial execution, cash conservation, and margin expansion. I am very encouraged by early indications of the plan’s success demonstrated in the first quarter. The strategic reset has created a renewed energy within Sonendo, and I’m excited about the opportunity going forward.”
First Quarter 2024 Financial Results
Except as otherwise indicated, the GAAP and non-GAAP financial measures presented in this press release exclude discontinued operations.
Total revenue from continuing operations was
Gross margin from continuing operations for the first quarter of 2024 was
Total operating expenses for the first quarter of 2024 were
Operating loss was
Net loss from both continuing and discontinued operations was
Cash and cash equivalents and short-term investments as of March 31, 2024 totaled
2024 Financial Guidance
The company expects total revenue for the full year of 2024 to be in the range of
Webcast and Conference Call Information
Sonendo will host a conference call to discuss the first quarter 2024 financial results after the market close on Wednesday, May 8, 2024 at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. Investors interested in listening to the conference call may do so by dialing (833) 470-1428 for domestic callers or (404) 975-4893 for international callers, using access code: 627665. Live audio of the webcast will be available on the “Investors” section of the company’s website at: https://investor.sonendo.com. The webcast will be archived and available for replay for at least 90 days after the event.
About Sonendo
Sonendo is a commercial-stage medical technology company focused on saving teeth from tooth decay, the most prevalent chronic disease globally. Sonendo develops and manufactures the GentleWave® System, an innovative technology platform designed to treat tooth decay by cleaning and disinfecting the microscopic spaces within teeth without the need to remove tooth structure. The system utilizes a proprietary mechanism of action, which combines procedure fluid optimization, broad-spectrum acoustic energy and advanced fluid dynamics, to debride and disinfect deep regions of the complex root canal system in a less invasive procedure that preserves tooth structure. The clinical benefits of the GentleWave System when compared to conventional methods of root canal therapy include improved clinical outcomes, such as superior cleaning that is independent of root canal complexity and tooth anatomy, high and rapid rates of healing and minimal to no post-operative pain. In addition, the GentleWave System can improve the workflow and economics of dental practices. In March 2024, Sonendo divested the TDO® Software segment by selling substantially all the assets and liabilities of TDO Software, Inc.
For more information about Sonendo and the GentleWave System, please visit www.sonendo.com. To find a GentleWave doctor in your area, please visit www.gentlewave.com.
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 Securities and Exchange Commission, including the “Risk Factors” set forth in our Annual Report on Form 10-K, as supplemented by our quarterly reports on Form 10-Q. Such filings are available on our website or at www.sec.gov. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent developments, events, or circumstances, except as may be required under applicable securities laws. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
Use of Non-GAAP Financial Measures
Sonendo’ financial results are prepared in accordance with generally accepted accounting principles in
For a reconciliation of our Non-GAAP measures presented herein to GAAP measures, the most directly comparable GAAP financial measure, please see “Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin” and “Reconciliation of GAAP to Non-GAAP Operating Loss” in the financial schedules below.
SONENDO, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) |
||||||||
|
|
March 31, |
|
December 31, |
||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(Unaudited) |
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
18,580 |
|
|
$ |
14,009 |
|
Short-term investments |
|
|
15,009 |
|
|
|
32,773 |
|
Accounts receivable, net |
|
|
4,176 |
|
|
|
4,790 |
|
Inventory |
|
|
12,116 |
|
|
|
11,074 |
|
Prepaid expenses and other current assets |
|
|
1,611 |
|
|
|
1,969 |
|
Current assets of discontinued operations |
|
|
1,162 |
|
|
|
656 |
|
Total current assets |
|
|
52,654 |
|
|
|
65,271 |
|
Property and equipment, net |
|
|
767 |
|
|
|
461 |
|
Operating lease right-of-use assets |
|
|
3,227 |
|
|
|
2,703 |
|
Other assets |
|
|
127 |
|
|
|
128 |
|
Non-current assets of discontinued operations |
|
|
— |
|
|
|
9,597 |
|
Total assets |
|
$ |
56,775 |
|
|
$ |
78,160 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
916 |
|
|
$ |
1,142 |
|
Accrued expenses |
|
|
2,737 |
|
|
|
3,072 |
|
Accrued compensation |
|
|
1,470 |
|
|
|
2,413 |
|
Operating lease liabilities |
|
|
1,172 |
|
|
|
1,250 |
|
Current portion of term loan |
|
|
10,800 |
|
|
|
24,900 |
|
Other current liabilities |
|
|
1,786 |
|
|
|
1,844 |
|
Current liabilities of discontinued operations |
|
|
73 |
|
|
|
700 |
|
Total current liabilities |
|
|
18,954 |
|
|
|
35,321 |
|
Operating lease liabilities, net of current |
|
|
1,888 |
|
|
|
1,423 |
|
Term loan, net of current |
|
|
10,911 |
|
|
|
12,467 |
|
Other liabilities |
|
|
491 |
|
|
|
530 |
|
Total liabilities |
|
|
32,244 |
|
|
|
49,741 |
|
Commitments and contingencies |
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
70 |
|
|
|
64 |
|
Additional paid-in-capital |
|
|
461,237 |
|
|
|
458,357 |
|
Accumulated other comprehensive loss |
|
|
(1 |
) |
|
|
11 |
|
Accumulated deficit |
|
|
(436,775 |
) |
|
|
(430,013 |
) |
Total stockholders’ equity |
|
|
24,531 |
|
|
|
28,419 |
|
Total liabilities and stockholders’ equity |
|
$ |
56,775 |
|
|
$ |
78,160 |
|
SONENDO, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (In thousands, except share and per share data) |
||||||||
|
|
Three Months Ended March 31, |
||||||
|
|
2024 |
|
|
2023 |
|
||
Revenue, net |
|
$ |
7,047 |
|
|
$ |
8,678 |
|
Cost of sales |
|
|
|
|
||||
Product and service |
|
|
4,900 |
|
|
|
6,700 |
|
Impairment of long-lived assets |
|
|
146 |
|
|
|
— |
|
Total cost of sales |
|
|
5,046 |
|
|
|
6,700 |
|
Gross profit |
|
|
2,001 |
|
|
|
1,978 |
|
Operating expenses: |
|
|
|
|
||||
Selling, general and administrative |
|
|
10,061 |
|
|
|
14,114 |
|
Research and development |
|
|
2,189 |
|
|
|
2,927 |
|
Total operating expenses |
|
|
12,250 |
|
|
|
17,041 |
|
Operating loss |
|
|
(10,249 |
) |
|
|
(15,063 |
) |
Other expense, net: |
|
|
|
|
||||
Interest and financing costs, net |
|
|
(1,940 |
) |
|
|
(579 |
) |
Loss before income tax expense |
|
|
(12,189 |
) |
|
|
(15,642 |
) |
Income tax expense |
|
|
— |
|
|
|
— |
|
Loss from continuing operations, net of tax |
|
|
(12,189 |
) |
|
|
(15,642 |
) |
Income from discontinued operations, net of tax |
|
|
5,427 |
|
|
|
271 |
|
Net loss |
|
$ |
(6,762 |
) |
|
$ |
(15,371 |
) |
|
|
|
|
|
||||
Other comprehensive income (net of tax): |
|
|
|
|
||||
Unrealized (loss) gain on short-term investments |
|
|
(12 |
) |
|
|
56 |
|
Comprehensive loss |
|
$ |
(6,774 |
) |
|
$ |
(15,315 |
) |
Net loss per share from continuing operations – basic and diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.16 |
) |
Net income per share from discontinued operations – basic and diluted |
|
$ |
0.06 |
|
|
$ |
0.00 |
|
Net loss per share – basic and diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.16 |
) |
Weighted-average shares outstanding – basic and diluted |
|
|
94,822,835 |
|
|
|
93,391,444 |
|
SONENDO, INC. RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT AND GROSS MARGIN (unaudited, in thousands) |
||||||||
|
|
Three Months Ended March 31 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Gross profit |
|
$ |
2,001 |
|
|
$ |
1,978 |
|
Gross margin |
|
|
28 |
% |
|
|
23 |
% |
|
|
|
|
|
|
|
||
Adjustments: |
|
|
|
|
|
|
||
Impairment of long-lived assets |
|
|
146 |
|
|
|
— |
|
Non-GAAP gross profit |
|
$ |
2,147 |
|
|
$ |
1,978 |
|
Non-GAAP gross margin |
|
|
30 |
% |
|
|
23 |
% |
SONENDO, INC. RECONCILIATION OF GAAP TO NON-GAAP OPERATING LOSS (unaudited, in thousands) |
||||||||
|
|
Three Months Ended March 31 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
GAAP operating loss |
|
$ |
10,249 |
|
|
$ |
15,063 |
|
Adjustments: |
|
|
|
|
|
|||
Stock based compensation: |
|
|
|
|
|
|||
Included in cost of sales |
|
|
(302 |
) |
|
|
(139 |
) |
Included in selling, general and administrative |
|
|
(1,724 |
) |
|
|
(1,540 |
) |
Included in research and development |
|
|
(495 |
) |
|
|
(224 |
) |
Depreciation and amortization |
|
|
|
|
|
|||
Included in cost of sales |
|
|
— |
|
|
|
(177 |
) |
Included in selling, general and administrative |
|
|
(55 |
) |
|
|
(150 |
) |
Included in research and development |
|
|
— |
|
|
|
(31 |
) |
Impairment of long-lived assets |
|
|
|
|
|
|||
Included in cost of sales |
|
|
(146 |
) |
|
|
— |
|
Non-GAAP operating loss |
|
$ |
7,527 |
|
|
$ |
12,802 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240508041029/en/
Investor Contact:
Gilmartin Group
Greg Chodaczek
IR@Sonendo.com
Source: Sonendo
FAQ
What was Sonendo's total revenue for Q1 2024?
What were the strategic reset priorities announced by Sonendo?
What was the gain from the divestment of TDO practice management software segment?
What is Sonendo's raised revenue guidance range for 2024?
What was Sonendo's GAAP operating loss for Q1 2024?
