Sonendo (SONX) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $8.3 million, a 5% year-over-year decrease, with net loss from continuing operations at $7.4 million, a 58% improvement from Q2 2023.

• Gross margin improved to 37.5% from -5.5% year-over-year, driven by lower manufacturing and inventory charges.

• Operating expenses fell 42% year-over-year in Q2, reflecting cost-saving measures and headcount reductions.

• Adjusted EBITDA loss improved to $5.7 million, a 53%–55% year-over-year improvement.

• Raised full-year 2024 revenue guidance to $31–$32 million, up from $29–$31 million.

Financial highlights

• Q2 2024 revenue: $8.3 million (Q2 2023: $8.8 million); six-month revenue: $15.4 million (2023: $17.4 million).

• Console revenue grew to $2.4 million, with 48 units sold (35 upgrades); installed base reached 1,155 units.

• Procedure instrument revenue declined to $4.7 million from $5.6 million year-over-year; other product revenue increased to $1.2 million.

• GAAP gross margin: 37.5% (Q2 2024), up from -5.5% (Q2 2023); adjusted gross margin: 40.7% vs. 28.7%.

• Free cash flow burn improved to -$6.7 million in Q2 2024; cash and short-term investments at $24.2 million as of June 30, 2024.

Outlook and guidance

• Full-year 2024 revenue guidance increased to $31–$32 million.

• Adjusted gross margin expected at 40%–41% for H2 2024, with a long-term target above 60%.

• Adjusted EBITDA loss for 2024 expected at $25–$26 million, a 41%–44% reduction from 2023.

• Operating expenses expected to decrease for the remainder of 2024 and into 2025.

• Additional financing will be required to fund future negative cash flows and maintain compliance with loan covenants.