Joseph Federico's questions to Sonendo (SONX) leadership • Q2 2024
Question
Joseph Federico of Stifel Financial Corp. questioned the drivers of the strong Q2 gross margin, asking why 2025 guidance wasn't raised. He also sought an updated revenue target for achieving cash flow breakeven and clarity on whether new sales incentives were successfully boosting procedure utilization ahead of direct sales.
Answer
Executive Bjarne Bergheim and CFO John Bostjancic attributed the gross margin beat to improved G4 reliability and cost controls, setting a new 40-41% target for H2 2024 but deeming it too early to raise 2025 guidance. Bergheim stated there is no new revenue target for cash flow breakeven, instead pointing to a 53% YoY reduction in adjusted EBITDA loss. He confirmed new sales incentives are working, highlighting that customers used 22,500 more PIs than were sold YTD, correcting a prior inventory imbalance and aligning sales with utilization.