Sonendo Reports Q2 2024 Financial Results, Raises Guidance

Sonendo, Inc. (NYSE: SONX) Reports Strong Q2 2024 Financial Results and Strategic Progress

Sonendo, Inc., a prominent dental technology firm, has released its financial outcomes for the second quarter of 2024, showcasing significant growth as part of its strategic reset. The company’s efforts to position its GentleWave technology as a standard practice in root canal therapy are yielding positive results.

For the full year 2024, Sonendo has increased its revenue guidance to a range of $31 million to $32 million, with a reported GAAP gross margin of 37.5% for the quarter. Adjusted gross margins are projected to reach between 40% and 41% in the latter half of 2024. Despite experiencing a year-over-year decline in total revenue to $8.3 million for Q2, the company recorded a 7% increase in console sales and expects to see a decrease in adjusted EBITDA loss, with a forecasted return to double-digit revenue growth in 2025.

Key Takeaways

• Sonendo’s total revenue for Q2 2024 stood at $8.3 million, representing a 7% increase in console sales compared to the previous year.
• The full-year revenue guidance for 2024 has been raised to between $31 million and $32 million.
• A GAAP gross margin of 37.5% was reported for Q2, with expected adjusted gross margins between 40% and 41% for the second half of 2024.
• The company is examining financing options to enhance its balance sheet, holding $24.2 million in cash and short-term investments as of June 30, 2024.
• Sonendo anticipates a reduced adjusted EBITDA loss in the latter half of 2024, predicting a return to double-digit revenue growth in 2025.

Company Outlook

• The company aims to achieve double-digit revenue growth in 2025.
• Active exploration of financing options is underway to bolster its financial standing.

Challenges

• Total revenue for Q2 2024 showed a decline compared to the previous year.
• Procedure instrument sales (PI) fell short of expectations.

Positive Developments

• Sonendo demonstrated advancements in commercial execution, improved gross margins, and financial efficiency.
• Console sales, particularly for enhanced upgrades to the G4 GentleWave system, have risen.
• The business has effectively reduced unexpected service calls, resulting in better utilization rates.

Additional Insights

• Sonendo is not yet ready to provide revenue targets related to cash flow breakeven.
• The management is focused on establishing a growth trajectory reminiscent of its rapid expansion from 2017 to 2021.

Conference Call Highlights

During the recent earnings call, CEO Bjarne Bergheim emphasized the company’s strategic reset and the focused execution necessary to drive growth. The leadership is motivated by indicators of early success and expressed gratitude for the commitment shown by employees and stakeholders during this transition.

In summary, Sonendo, Inc. is navigating through its strategic overhaul with a clear focus on driving growth, enhancing its market position, and achieving operational efficiency. The company remains optimistic about its future trajectory and the upcoming fiscal year.