Sonendo Inc. Reports Fourth Quarter and Full Year 2024 Financial Results
Quarterly Highlights
-
Generated
$8.3 million -
Drove substantial 1,570 and 1,260 basis points of GAAP and adjusted (non-GAAP) gross margin expansion for the fourth quarter 2024 to
41.1% and41.3% , respectively, as compared to the prior year quarter; -
Significantly reduced GAAP operating loss to
$5.6 million $4.7 million 45.2% and45.0% , respectively, from the prior year quarter; and -
Significantly reduced free cash flow burn by
69.4% from the prior year period to$2.9 million
Annual Highlights
-
Generated
$31.7 million -
Drove substantial 2,390 and 1,260 basis points of GAAP and adjusted (non-GAAP) gross margin expansion for the full-year 2024 to
37.4% and40.0% , respectively; -
Significantly reduced GAAP operating loss to
$29.4 million $23.0 million 50.4% and48.2% , respectively, from the prior year; and -
Significantly reduced free cash flow burn to
$24.8 million 47.2% from the prior year.
“Throughout 2024, we have restructured the business and stabilized revenue while significantly reducing operating expenses and free cash flow burn. The latest operational results demonstrate that we are making great progress,” said Bjarne Bergheim, President and Chief Executive Officer of Sonendo. “We’ve stabilized top line revenue and exited 2024 with average monthly procedural instrument utilization from new customers more than doubling compared to earlier in the year, while also consistently delivering substantial gross margin expansion, a sharp reduction in operating loss, and a marked decrease in free cash flow burn. With each successive quarter of meaningfully improved financial performance that we achieved in 2024, these achievements underscore our steadfast commitment to operational excellence and position Sonendo for robust, long-term and profitable growth. Additionally, we ended 2024 with
Fourth 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 March 2024.
Total revenue was
GAAP gross margin for the fourth quarter of 2024 increased to
Total operating expenses for the fourth 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 December 31, 2024, the Company’s cash and cash equivalents and short-term investments totaled
Full Year 2024 Financial Results
Total revenue was
Gross margin for the full year 2024 was
Total operating expenses were
Operating loss totaled
Net loss from continuing operations totaled
Free cash flow burn (non-GAAP) totaled
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.
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. 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’s financial results are prepared in accordance with generally accepted accounting principles in
Management believes that the presentation of Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA Loss and Free Cash Flow (Burn) (collectively, the “Non-GAAP Measures”) is useful in helping identify the Company’s core operating performance and enables management to consistently analyze the period-to-period financial performance of the core business operations. Management also believes that the Non-GAAP Measures will enable investors to assess the Company in the same way that management has historically assessed the Company’s operating results against comparable companies with conventional accounting methodologies. The Company’s definition for each of the Non-GAAP Measures has limitations as an analytical tool and may differ from other companies reporting similarly named measures. Non-GAAP Measures should not be considered measures of financial performance under GAAP, and the items excluded from (or, in the case of Free Cash Flow (Burn), included in) such Non-GAAP Measures should not be considered in isolation or as alternatives to financial statement data presented in the financial statements as an indicator of financial performance or liquidity. These Non-GAAP Measures should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP results.
Adjusted Gross Profit and Adjusted Gross Margin
Adjusted Gross Profit and Adjusted Gross Margin represent GAAP Gross Profit and GAAP Gross Margin, respectively, excluding the impact of the following items recorded in cost of sales:
- Excess and obsolete inventory charges related to recently discontinued products. Management excludes this item when evaluating the Company’s operating performance because of its unusually occurring nature and the significant volatility of these charges, which are related to infrequent discrete decisions to phase out or discontinue specific products.
- Impairments of long-lived assets. Management excludes this item when evaluating the Company’s operating performance because these amounts represent costs that are capitalizable as purchases of long-lived assets, but for GAAP purposes are then immediately impaired under ASC 360. Such immediate impairments are not indicative of the Company’s ongoing operational performance.
- Stock-based compensation. Management excludes this item when evaluating the Company’s operating performance because it is a non-cash expense.
Adjusted EBITDA Loss
Adjusted EBITDA Loss consists of GAAP earnings (loss) before income tax expense, interest and financing costs, net, depreciation and amortization (“EBITDA”), excluding the impact of stock-based compensation, excess and obsolete inventory charges related to recently discontinued products, impairments of long-lived assets and transaction costs, net of payments received, related to the Company’s attempted acquisition of Biolase, and financing costs recorded herein. In addition to the explanations provided above, the Company’s excludes transaction costs, net of payments received, related to the Company’s attempted acquisition of Biolase and financing costs in the calculations of Adjusted EBITDA because such amounts are infrequent and highly volatile in nature as such transactions are not a core component of the Company’s strategy nor its recurring operations.
Free Cash Flow (Burn)
Free Cash Flow (Burn) is calculated by subtracting (adding) cash used to purchase property and equipment expenditures from (to) net cash flows provided by (used in) operating activities. Free cash flow (burn) is an important indicator of how much cash is generated or used by the Company’s business operations, including capital expenditures. Management uses free cash flow (burn) to measure progress on its capital efficiency and cash flow initiatives.
The following tables present reconciliations of various financial measures calculated in accordance with GAAP to those Non-GAAP measures that exclude (or, in the case of free cash flow burn, include) items specified in the tables. The GAAP measures shown in the tables below represent the most comparable GAAP measure to the applicable non-GAAP measures shown in the table.
The Company may, in the future, incur expenses of a nature similar to many of the non-GAAP adjustments described above, and exclusion (or inclusion) of these items from (in) its Non-GAAP Measures should not be construed as an inference that all of these costs are unusual, infrequent or non-recurring.
SONENDO, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) |
||||||||
|
|
December 31, |
|
|
December 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
10,226 |
|
|
$ |
14,009 |
|
Short-term investments |
|
|
1,401 |
|
|
|
32,773 |
|
Accounts receivable, net |
|
|
3,682 |
|
|
|
4,790 |
|
Inventory, net |
|
|
10,210 |
|
|
|
11,074 |
|
Prepaid expenses and other current assets |
|
|
1,286 |
|
|
|
1,969 |
|
Current assets of discontinued operations |
|
|
1,000 |
|
|
|
656 |
|
Total current assets |
|
|
27,805 |
|
|
|
65,271 |
|
Property and equipment, net |
|
|
— |
|
|
|
461 |
|
Operating lease right-of-use assets |
|
|
3,338 |
|
|
|
2,703 |
|
Other assets |
|
|
122 |
|
|
|
128 |
|
Non-current assets of discontinued operations |
|
|
— |
|
|
|
9,597 |
|
Total assets |
|
$ |
31,265 |
|
|
$ |
78,160 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
1,962 |
|
|
$ |
1,142 |
|
Accrued expenses |
|
|
2,002 |
|
|
|
3,072 |
|
Accrued compensation |
|
|
2,580 |
|
|
|
2,413 |
|
Operating lease liabilities |
|
|
1,085 |
|
|
|
1,250 |
|
Current portion of term loan |
|
|
10,800 |
|
|
|
24,900 |
|
Other current liabilities |
|
|
1,510 |
|
|
|
1,844 |
|
Current liabilities of discontinued operations |
|
|
— |
|
|
|
700 |
|
Total current liabilities |
|
|
19,939 |
|
|
|
35,321 |
|
Operating lease liabilities, net of current |
|
|
2,168 |
|
|
|
1,289 |
|
Term loan, net of current |
|
|
3,637 |
|
|
|
12,467 |
|
Other liabilities |
|
|
330 |
|
|
|
530 |
|
Non-current liabilities of discontinued operations |
|
|
— |
|
|
|
134 |
|
Total liabilities |
|
|
26,074 |
|
|
|
49,741 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
— |
|
|
|
— |
|
Additional paid-in-capital |
|
|
463,236 |
|
|
|
458,421 |
|
Accumulated other comprehensive gain |
|
|
1 |
|
|
|
11 |
|
Accumulated deficit |
|
|
(458,046 |
) |
|
|
(430,013 |
) |
Total stockholders’ equity |
|
|
5,191 |
|
|
|
28,419 |
|
Total liabilities and stockholders’ equity |
|
$ |
31,265 |
|
|
$ |
78,160 |
|
SONENDO, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except share and per share data) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
(Unaudited) |
|
|
|
|
||||||||||
Revenue, net |
|
$ |
8,305 |
|
|
$ |
9,024 |
|
|
$ |
31,702 |
|
|
$ |
34,628 |
|
Cost of sales |
|
|
4,890 |
|
|
|
6,732 |
|
|
|
19,860 |
|
|
|
29,959 |
|
Gross profit |
|
|
3,415 |
|
|
|
2,292 |
|
|
|
11,842 |
|
|
|
4,669 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Selling and marketing |
|
|
4,239 |
|
|
|
6,068 |
|
|
|
17,097 |
|
|
|
28,697 |
|
General and administrative |
|
|
3,401 |
|
|
|
4,536 |
|
|
|
17,353 |
|
|
|
24,794 |
|
Research and development |
|
|
1,413 |
|
|
|
1,965 |
|
|
|
6,758 |
|
|
|
10,443 |
|
Total operating expenses |
|
|
9,053 |
|
|
|
12,569 |
|
|
|
41,208 |
|
|
|
63,934 |
|
Operating loss |
|
|
(5,638 |
) |
|
|
(10,277 |
) |
|
|
(29,366 |
) |
|
|
(59,265 |
) |
Total interest expense and other income |
|
|
(731 |
) |
|
|
(994 |
) |
|
|
(4,174 |
) |
|
|
(3,196 |
) |
Loss before income tax expense |
|
|
(6,369 |
) |
|
|
(11,271 |
) |
|
|
(33,540 |
) |
|
|
(62,461 |
) |
Income tax expense |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
Loss from continuing operations, net of tax |
|
|
(6,371 |
) |
|
|
(11,273 |
) |
|
|
(33,542 |
) |
|
|
(62,463 |
) |
Income from discontinued operations, net of tax |
|
|
— |
|
|
|
397 |
|
|
|
5,509 |
|
|
|
1,544 |
|
Net loss |
|
$ |
(6,371 |
) |
|
$ |
(10,876 |
) |
|
$ |
(28,033 |
) |
|
$ |
(60,919 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss (net of tax): |
|
|
|
|
|
|
|
|
||||||||
Unrealized (loss) gain on short-term investments |
|
|
(2 |
) |
|
|
17 |
|
|
|
(10 |
) |
|
|
72 |
|
Comprehensive loss |
|
$ |
(6,373 |
) |
|
$ |
(10,859 |
) |
|
$ |
(28,043 |
) |
|
$ |
(60,847 |
) |
Net loss per share from continuing operations – basic and diluted |
|
$ |
(13.35 |
) |
|
$ |
(23.85 |
) |
|
$ |
(70.63 |
) |
|
$ |
(132.92 |
) |
Net income per share from discontinued operations – basic and diluted |
|
$ |
— |
|
|
$ |
0.84 |
|
|
$ |
11.60 |
|
|
$ |
3.29 |
|
Net loss per share – basic and diluted |
|
$ |
(13.35 |
) |
|
$ |
(23.01 |
) |
|
$ |
(59.03 |
) |
|
$ |
(129.63 |
) |
Weighted-average shares outstanding – basic and diluted |
|
|
477,117 |
|
|
|
472,684 |
|
|
|
474,856 |
|
|
|
469,943 |
|
SONENDO, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (unaudited; in thousands; except percentage) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Gross profit |
|
$ |
3,415 |
|
|
$ |
2,292 |
|
|
$ |
11,842 |
|
|
$ |
4,669 |
|
Gross margin |
|
|
41.1 |
% |
|
|
25.4 |
% |
|
|
37.4 |
% |
|
|
13.5 |
% |
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Excess and obsolete inventory reserve related to recently discontinued products |
|
|
— |
|
|
|
— |
|
|
|
341 |
|
|
|
2,917 |
|
Impairment of long-lived assets |
|
|
— |
|
|
|
243 |
|
|
|
161 |
|
|
|
1,584 |
|
Stock-based compensation expense |
|
|
13 |
|
|
|
54 |
|
|
|
337 |
|
|
|
316 |
|
Adjusted gross profit |
|
$ |
3,428 |
|
|
$ |
2,589 |
|
|
$ |
12,681 |
|
|
$ |
9,486 |
|
Adjusted gross margin |
|
|
41.3 |
% |
|
|
28.7 |
% |
|
|
40.0 |
% |
|
|
27.4 |
% |
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations, net of tax |
|
$ |
(6,371 |
) |
|
$ |
(11,273 |
) |
|
$ |
(33,542 |
) |
|
$ |
(62,463 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Interest and financing costs, net |
|
|
731 |
|
|
|
994 |
|
|
|
4,174 |
|
|
|
3,196 |
|
Depreciation and amortization |
|
|
75 |
|
|
|
11 |
|
|
|
278 |
|
|
|
1,163 |
|
Excess and obsolete inventory reserve related to recently discontinued products |
|
|
— |
|
|
|
— |
|
|
|
341 |
|
|
|
2,917 |
|
Stock-based compensation expense |
|
|
600 |
|
|
|
1,443 |
|
|
|
4,454 |
|
|
|
7,097 |
|
Impairment of long-lived assets |
|
|
615 |
|
|
|
280 |
|
|
|
776 |
|
|
|
3,672 |
|
Transaction and financing costs (reimbursements) related to Biolase acquisition and other strategic transactions |
|
|
(350 |
) |
|
|
— |
|
|
|
524 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
(4,700 |
) |
|
$ |
(8,545 |
) |
|
$ |
(22,995 |
) |
|
$ |
(44,418 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Cash Flows |
|
|
|
|
|
|
|
|
||||||||
Cash flow used in operating activities |
|
$ |
(2,934 |
) |
|
$ |
(9,505 |
) |
|
$ |
(24,652 |
) |
|
$ |
(46,062 |
) |
Purchase of property and equipment |
|
|
— |
|
|
|
(86 |
) |
|
|
(161 |
) |
|
|
(929 |
) |
Free cash flow (burn) |
|
$ |
(2,934 |
) |
|
$ |
(9,591 |
) |
|
$ |
(24,813 |
) |
|
$ |
(46,991 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250326534061/en/
Investor Contact:
IR@Sonendo.com
Source: Sonendo
