10-Q · August 7, 2024
Q2 2024 revenue of $8.314M declined 5.1% year-over-year but beat consensus ($7.6M). Gross profit swung to $3.116M (≈37.5% margin) from a gross loss of $(0.485)M a year ago; operating loss narrowed to $(6.687)M from…
Earnings analysis · 10-Q
SONX earnings analysis
Filed November 12, 2024 · Our reading of the company's report
The latest report
Q3 2024 showed meaningful operational improvement: revenue was $8,036,000 (down slightly from $8,163,000 in Q3 2023), gross profit rose to $3,310,000 (41.2% margin) from $884,000 (10.8%), and operating loss narrowed to…
Read full summary
Q3 2024 showed meaningful operational improvement: revenue was $8,036,000 (down slightly from $8,163,000 in Q3 2023), gross profit rose to $3,310,000 (41.2% margin) from $884,000 (10.8%), and operating loss narrowed to $6,792,000 from $16,565,000 a year earlier. However, the company remains cash constrained — cash + short-term investments totaled $17,284,000 and management discloses substantial doubt about going concern and the need for additional financing. The software business was divested and reported as discontinued operations, producing cash proceeds of $14,208,000 YTD and a gain of $5,703,000.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-15.77
What stood out
-
Gross margin recovery
Gross profit increased to $3,310,000 in Q3 2024 (41.2% gross margin) from $884,000 in Q3 2023 (10.8%), an improvement of $2,426,000 and ~30.4 percentage points.
-
Operating expense reduction
Total operating expenses fell to $10,102,000 in Q3 2024 from $17,449,000 in Q3 2023, a reduction of $7,347,000, supporting the margin recovery.
-
Operating loss materially narrowed
Operating loss improved to $6,792,000 in Q3 2024 from $16,565,000 in Q3 2023, a quarter-over-quarter improvement of $9,773,000.
-
EPS improved vs prior year
Net loss per share improved to $(15.77) in Q3 2024 from $(37.01) in Q3 2023 (an improvement of $21.24 per share).
-
Disposal provided cash and one-time gain
Proceeds from sale of discontinued operations were $14,208,000 YTD and the sale generated a gain of $5,703,000 (reported in adjustments to cash flow).
-
Near-term debt reduced
Current portion of term loan decreased to $10,800,000 as of September 30, 2024 from $24,900,000 as of December 31, 2023 (reduction of $14,100,000).
What to watch
-
Liquidity / going-concern risk
Cash and cash equivalents were $13,096,000 and short-term investments were $4,188,000 (total $17,284,000) as of September 30, 2024 and the filing discloses 'substantial doubt' about the Company's ability to continue as a going concern.
-
Ongoing cash burn
Net cash used in operating activities for the nine months ended September 30, 2024 was $21,718,000 and net loss before tax for the nine months was $27,171,000, indicating continued negative cash flow.
-
Market listing / liquidity compliance risk
The company was delisted from the NYSE (effective Nov 22, 2023) and received OTC notices: bid price cure period related to $0.10 requirement expired Dec 2, 2024 and a market-cap cure (market cap < $5 million) expires Feb 7, 2025, risking further transfer to OTC Pink.
-
Large decline in short-term investments
Short-term investments decreased from $32,773,000 at December 31, 2023 to $4,188,000 at September 30, 2024, a decline of $28,585,000, materially reducing liquid reserves.
-
Outstanding term loan and interest burden
Aggregate term loan outstanding on the balance sheet is $16,884,000 (current portion $10,800,000 and noncurrent $6,084,000) and the company reported interest expense of $1,010,000 for the quarter and cash interest paid YTD of $2,866,000.
-
Concentration on single product offering
Revenue remains concentrated in the GentleWave product line with continuing operations revenue of $8,036,000 for the quarter, leaving results sensitive to market acceptance and adoption.
Management's outlook
No explicit numeric guidance provided. MD&A states management 'expect[s] to continue to incur operating losses for the foreseeable future' and 'The Company will require additional financing' and is 'actively exploring financing options' while pursuing expense reductions. OTC compliance cure deadlines (Dec 2, 2024 and Feb 7, 2025) and the need for additional capital are emphasized; quantitative outlook deferred to financing progress and future disclosures.
Earlier filings 2
10-Q · November 8, 2023
Sonendo reported revenue of $10.406M in Q3 2023, up $0.560M (≈5.7%) versus Q3 2022, with gross profit essentially flat at $2.446M (gross margin ≈23.5%). Operating loss widened modestly to $(16.096)M (op margin ≈…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.