Sonim Technologies Reports Second Quarter and Six Month 2019 Financial Results

Q2 2019 Net Revenues Up 39% to $43.7 Million, Driving 41% Increase in Gross Profit and 15% Increase in Adjusted EBITDA Over Q2 2018

 

SAN MATEO, Calif. – July 24, 2019 – Sonim Technologies, Inc. (Nasdaq: SONM), a leading U.S. provider of ultra-rugged mobility solutions designed specifically for task workers physically engaged in their work environments, reported financial results for the second quarter and six months ended June 30, 2019.

Second Quarter 2019 Financial Highlights

  • Net revenues increased 39% to $43.7 million from $31.5 million in Q2 2018
  • Gross profit increased 41% to $14.8 million from $10.5 million in Q2 2018
  • On a GAAP basis, net loss totaled $6.1 million
  • Adjusted EBITDA (a non-GAAP metric reconciled below) increased 15% to $1.0 million from $894,000 in Q2 2018

 

Six Month 2019 Financial Highlights

  • Net revenues increased 41% to $70.2 million from $49.6 million in the first six months of 2018
  • Gross profit increased 53% to $24.2 million from $15.8 million in the first six months of 2018

 

Third Quarter and Fiscal 2019 Financial Outlook

  • For the third quarter ending September 30, 2019, the company expects net revenues to increase to between $49 million and $52 million, representing growth of 25% to 31% compared to $39.5 million in Q3 2018.
  • For the fiscal year ending December 31, 2019, the company continues to expect net revenues to increase between 25% and 30% compared to $135.7 million reported in fiscal 2018 and to achieve adjusted EBITDA profitability of between 4% and 6% of net revenues for the year as a whole.

 

Management Commentary

“Our success in the second quarter was driven by continued, effective sales execution, leading to the sustained operational momentum we’ve now realized over the last several quarters,” said Bob Plaschke, CEO of Sonim Technologies. “More specifically, the 39% topline growth we generated in Q2 was propelled by the first full quarter of sales of our XP3 device, along with increasing demand for our existing models, including the XP8 and XP5s. On a broader scale, our growth has been reinforced by several positive industry tailwinds and mandates, including FirstNet and the early stages of the transition from legacy land mobile radio (LMR) and push-to-talk (PTT) to smartphone and LTE networks. As the leading provider of next generation ultra-rugged mobile solutions, we are ideally positioned to further capitalize on these two market opportunities. We are encouraged by our first half results, and we expect to continue to deliver on the metrics that will drive long-term growth for our company.”

 

Second Quarter 2019 Financial Results

Net revenues for the second quarter of 2019 increased 39% to $43.7 million from $31.5 million in the second quarter of 2018. The increase in net revenues was primarily due to increased volumes for both the XP8 smartphone and the XP5s feature phone to major wireless carriers, as well as the first full quarter of shipments of the newly introduced XP3 feature phone. Total unit sales increased 108% to approximately 150,800 units compared to approximately 72,500 units sold in Q2 2018. With the introduction of the higher volume XP3 in the second quarter of 2019, feature phones represented about 77% of unit sales compared to approximately 46% in Q2 of 2018.

Gross profit for the second quarter of 2019 increased 41% to $14.8 million (33.9% of net revenues) from $10.5 million (33.5% of net revenues) in the second quarter of 2018. The increase in gross profit was primarily due to a decrease in manufacturing costs resulting from higher volumes.

Net loss attributable to common stockholders for the second quarter of 2019 totaled $6.1 million or $(0.34) per basic and diluted share (based on 18.1 million shares), compared to net loss attributable to common stockholders of $3.1 million, or $(3.01) per basic and diluted share (based on 1.0 million shares), in the second quarter of 2018. Net loss attributable to common sto