Sonendo Inc. Reports Fourth Quarter and Full Year 2023 Financial Results and Issues Full Year 2024 Revenue Guidance
- Total revenue for 2023 was $43.9 million, a 5% increase over 2022.
- Divestiture of TDO segment resulted in gross proceeds of $16.0 million.
- Improved operating leverage and gross margin in Q4 2023.
- 2024 revenue guidance between $28.0 million to $30.0 million.
- Decrease in revenue for Q4 2023 compared to Q4 2022.
- Net loss of $10.9 million for Q4 2023.
- Full-year 2023 net loss of $60.9 million.
Highlights
-
Total revenue of
$43.9 million 5% over the full year 2022 -
As of December 31, 2023, the installed base was 1,134 units, representing growth of approximately
16% compared to December 31, 2022 -
In March 2024, finalized divestiture of our TDO practice management software segment, resulting in gross proceeds of approximately
$16.0 million -
Restructured our Perceptive term loan including a one-time
$15.0 million
“We are pleased to have closed the year with a strong installed base and improved operating leverage despite prevailing macroeconomic headwinds. In the fourth quarter we made significant strides in gross margin improvement and cash burn reduction,” said Bjarne Bergheim, President and Chief Executive Officer of Sonendo. “As we start 2024, we are refining our commercial strategy. Following the sale of TDO, our core business is supported by a healthier balance sheet that allows us to acutely focus on GentleWave procedure adoption.”
Fourth Quarter 2023 Financial Results
Total revenue was
Gross margin for the fourth quarter of 2023 was
Total operating expenses for the fourth quarter of 2023 were
Loss from operations was
Net loss was
Cash and cash equivalents and short-term investments as of December 31, 2023 totaled
Full Year 2023 Financial Results
Total revenue was
Gross margin for the full year 2023 was
Total operating expenses for 2023 were
Loss from operations was
Net loss was
2024 Financial Guidance
The Company expects the full year 2024 total revenue to be in the range of
Webcast and Conference Call Information
Sonendo will host a conference call to discuss the fourth quarter and full year 2023 financial results after the market close on Monday, March 11, 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) 975-4839 for international callers, using access code: 426330. 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 Loss from Operations” in the financial schedules below.
SONENDO, INC. |
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CONSOLIDATED BALANCE SHEETS |
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(in thousands, except share data) |
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|
|
December 31, |
|
December 31, |
||||
|
|
2023 |
|
|
2022 |
|
||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
14,009 |
|
|
$ |
17,665 |
|
Short-term investments |
|
|
32,773 |
|
|
|
73,784 |
|
Accounts receivable, net |
|
|
5,081 |
|
|
|
5,798 |
|
Inventory |
|
|
11,074 |
|
|
|
15,462 |
|
Prepaid expenses and other current assets |
|
|
2,334 |
|
|
|
8,397 |
|
Total current assets |
|
|
65,271 |
|
|
|
121,106 |
|
Property and equipment, net |
|
|
664 |
|
|
|
2,860 |
|
Operating lease right-of-use assets |
|
|
2,974 |
|
|
|
2,455 |
|
Intangible assets, net |
|
|
661 |
|
|
|
2,292 |
|
Goodwill |
|
|
8,454 |
|
|
|
8,454 |
|
Other assets |
|
|
136 |
|
|
|
118 |
|
Total assets |
|
$ |
78,160 |
|
|
$ |
137,285 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
1,176 |
|
|
$ |
4,438 |
|
Accrued expenses |
|
|
3,266 |
|
|
|
5,357 |
|
Accrued compensation |
|
|
2,758 |
|
|
|
3,616 |
|
Operating lease liabilities |
|
|
1,377 |
|
|
|
1,114 |
|
Current portion of term loan |
|
|
24,900 |
|
|
|
— |
|
Other current liabilities |
|
|
1,844 |
|
|
|
2,191 |
|
Total current liabilities |
|
|
35,321 |
|
|
|
16,716 |
|
Operating lease liabilities, net of current |
|
|
1,423 |
|
|
|
1,095 |
|
Term loan, net of current |
|
|
12,467 |
|
|
|
36,746 |
|
Other liabilities |
|
|
530 |
|
|
|
773 |
|
Total liabilities |
|
|
49,741 |
|
|
|
55,330 |
|
Commitments and contingencies |
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
64 |
|
|
|
50 |
|
Additional paid-in-capital |
|
|
458,357 |
|
|
|
451,060 |
|
Accumulated other comprehensive gain (loss) |
|
|
11 |
|
|
|
(61 |
) |
Accumulated deficit |
|
|
(430,013 |
) |
|
|
(369,094 |
) |
Total stockholders’ equity |
|
|
28,419 |
|
|
|
81,955 |
|
Total liabilities and stockholders’ equity |
|
$ |
78,160 |
|
|
$ |
137,285 |
|
SONENDO, INC. |
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CONSOLIDATED STATEMENTS OF |
||||||||||||||||
OPERATIONS AND COMPREHENSIVE LOSS |
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(In thousands, except share and per share data) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
(Unaudited) |
|
|
|
|
||||||||||
Product revenue |
|
$ |
9,024 |
|
|
$ |
9,840 |
|
|
$ |
34,628 |
|
|
$ |
33,280 |
|
Software revenue |
|
|
2,668 |
|
|
|
2,390 |
|
|
|
9,237 |
|
|
|
8,376 |
|
Total revenue |
|
|
11,692 |
|
|
|
12,230 |
|
|
|
43,865 |
|
|
|
41,656 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
||||||||
Product and software |
|
|
7,617 |
|
|
|
8,900 |
|
|
|
31,559 |
|
|
|
31,176 |
|
Impairment of long-lived assets |
|
|
243 |
|
|
|
— |
|
|
|
1,584 |
|
|
|
— |
|
Total cost of sales |
|
|
7,860 |
|
|
|
8,900 |
|
|
|
33,143 |
|
|
|
31,176 |
|
Gross profit |
|
|
3,832 |
|
|
|
3,330 |
|
|
|
10,722 |
|
|
|
10,480 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative |
|
|
11,163 |
|
|
|
14,513 |
|
|
|
54,022 |
|
|
|
51,906 |
|
Research and development |
|
|
2,514 |
|
|
|
3,580 |
|
|
|
12,355 |
|
|
|
16,776 |
|
Impairment of long-lived assets |
|
|
37 |
|
|
|
— |
|
|
|
2,088 |
|
|
|
— |
|
Total operating expenses |
|
|
13,714 |
|
|
|
18,093 |
|
|
|
68,465 |
|
|
|
68,682 |
|
Loss from operations |
|
|
(9,882 |
) |
|
|
(14,763 |
) |
|
|
(57,743 |
) |
|
|
(58,202 |
) |
Other income (expense), net: |
|
|
|
|
|
|
|
|
||||||||
Interest and financing cost, net |
|
|
(994 |
) |
|
|
(469 |
) |
|
|
(3,174 |
) |
|
|
(3,228 |
) |
Employee retention credit |
|
|
— |
|
|
|
4,382 |
|
|
|
— |
|
|
|
4,382 |
|
Loss before income tax expense |
|
|
(10,876 |
) |
|
|
(10,850 |
) |
|
|
(60,917 |
) |
|
|
(57,048 |
) |
Income tax expense |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
Net loss |
|
$ |
(10,878 |
) |
|
$ |
(10,852 |
) |
|
$ |
(60,919 |
) |
|
$ |
(57,050 |
) |
Other comprehensive income (loss) (net of tax): |
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on marketable securities |
|
|
17 |
|
|
|
(12 |
) |
|
|
72 |
|
|
|
(61 |
) |
Net comprehensive loss |
|
$ |
(10,861 |
) |
|
$ |
(10,864 |
) |
|
$ |
(60,847 |
) |
|
$ |
(57,111 |
) |
Net loss per share attributable to common stock – basic and diluted |
|
$ |
(0.12 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.65 |
) |
|
$ |
(1.27 |
) |
Weighted-average shares outstanding – basic and diluted |
|
|
94,536,827 |
|
|
|
93,138,031 |
|
|
|
93,988,749 |
|
|
|
44,932,952 |
|
SONENDO, INC. |
||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP |
||||||||||||||||
GROSS PROFIT AND GROSS MARGIN |
||||||||||||||||
(in thousands) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Gross profit |
|
$ |
3,832 |
|
|
$ |
3,330 |
|
|
$ |
10,722 |
|
|
$ |
10,480 |
|
Gross margin |
|
|
33 |
% |
|
|
27 |
% |
|
|
24 |
% |
|
|
25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Impairment of long-lived assets |
|
|
243 |
|
|
|
— |
|
|
|
1,584 |
|
|
|
— |
|
Non-GAAP gross profit |
|
$ |
4,075 |
|
|
$ |
3,330 |
|
|
$ |
12,306 |
|
|
$ |
10,480 |
|
Non-GAAP gross margin |
|
|
35 |
% |
|
|
27 |
% |
|
|
28 |
% |
|
|
25 |
% |
SONENDO, INC. |
||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP |
||||||||||||||||
LOSS FROM OPERATIONS |
||||||||||||||||
(In thousands) |
||||||||||||||||
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
GAAP loss from operations |
|
$ |
9,882 |
|
|
$ |
14,763 |
|
|
$ |
57,743 |
|
|
$ |
58,202 |
|
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Stock based compensation: |
|
|
|
|
|
|
|
|
||||||||
Included in cost of sales |
|
|
(65 |
) |
|
|
(198 |
) |
|
|
(359 |
) |
|
|
(562 |
) |
Included in selling, general and administrative |
|
|
(1,301 |
) |
|
|
(1,909 |
) |
|
|
(6,228 |
) |
|
|
(5,729 |
) |
Included in research and development |
|
|
(125 |
) |
|
|
(304 |
) |
|
|
(689 |
) |
|
|
(1,191 |
) |
Depreciation and amortization |
|
|
|
|
|
|
|
|
||||||||
Included in cost of sales |
|
|
(67 |
) |
|
|
(202 |
) |
|
|
(807 |
) |
|
|
(709 |
) |
Included in selling, general and administrative |
|
|
(22 |
) |
|
|
(242 |
) |
|
|
(780 |
) |
|
|
(855 |
) |
Included in research and development |
|
|
(22 |
) |
|
|
(30 |
) |
|
|
(116 |
) |
|
|
(152 |
) |
Impairment of long-lived assets |
|
|
|
|
|
|
|
|
||||||||
Included in cost of sales |
|
|
(243 |
) |
|
|
— |
|
|
|
(1,584 |
) |
|
|
— |
|
Included in operating expenses |
|
|
(37 |
) |
|
|
— |
|
|
|
(2,088 |
) |
|
|
— |
|
Non-GAAP loss from operations |
|
$ |
8,000 |
|
|
$ |
11,878 |
|
|
$ |
45,092 |
|
|
$ |
49,004 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240311314845/en/
Investor Contact:
Gilmartin Group
Greg Chodaczek
IR@Sonendo.com
Source: Sonendo
FAQ
What was Sonendo's total revenue for the full year 2023?
How much revenue did the divestiture of TDO segment generate?
What was Sonendo's net loss for the fourth quarter of 2023?
What is Sonendo's revenue guidance for the full year 2024?
