SenesTech, Inc. (SNES)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered 17% revenue growth to $0.485M with record gross margin of 64.5%, as mix continued to shift toward Evolve; net loss narrowed modestly Y/Y and gross profit more than doubled, underscoring improving unit economics .
• Mix and channel strength drove the upside: Evolve represented 79% of revenue and e‑commerce reached 61% of sales; municipal deployments began in NYC and expanded in Chicago, with additional cities initiating pilots, setting up multi‑channel growth into 2H25 .
• Management reiterated cost discipline, citing ~$2M annualized expense reductions and a lower cash flow breakeven revenue threshold from ~$12M to $7M ($1.5M/quarter), a key milestone that could accelerate operating leverage as larger municipal and international orders land .
• Street consensus was not available for Q1 2025 (S&P Global showed no active EPS or revenue consensus), so no formal beat/miss can be determined; coverage remains limited for this micro‑cap [Values retrieved from S&P Global].

What Went Well and What Went Wrong

• What Went Well

  • Gross profit and margin inflected: gross profit rose to $313K (+132% Y/Y) and gross margin hit a record 64.5%, driven by higher Evolve mix and better manufacturing efficiencies .
  • Mix shift to Evolve and e‑commerce: Evolve was 79% of revenue (+40% Y/Y), and e‑commerce reached 61% of sales (+107% Y/Y), supporting scaling at attractive unit economics .
  • Municipal momentum: Initial rollouts in NYC and Chicago (Wicker Park/Bucktown) with additional orders from Baltimore, Los Angeles County, Boston area, and Waukesha suggest an emerging municipal demand curve and future order depth .

• What Went Wrong

  • Brick‑and‑mortar remains slow: Gaining shelf space takes time; management noted retailers want online proof points before committing to in‑store placement, with only modest early progress (e.g., Ace regional service centers) .
  • International revenue paused in Q1: No international revenue recognized in the quarter as teams await reorders and pending regulatory approvals; Q4 2024 included >$50K of international shipments, highlighting quarterly lumpiness .
  • Profitability still ahead: Despite better margins, Q1 operating loss was $(1.663)M with net loss $(1.665)M; breakeven depends on scaling to ~$1.5M quarterly revenue and landing larger municipal/international orders .

Financial Results

Segment/channel and KPI details:

• Product Mix and Channel
  • Evolve share of revenue: 76% in Q4 2024 (Evolve Rat 52%, Evolve Mouse 24%) → 79% in Q1 2025 .
  • E‑commerce share of revenue: 61% in Q1 2025; e‑commerce +107% Y/Y in Q1 .
  • Municipal: ~7x Y/Y growth in Q1 from a small base; initial deployments in NYC and Chicago .

Note: The Q1 2025 press release exhibit references “quarter ended March 31, 2024,” but the 8‑K filing and financial statements clearly reflect Q1 2025 data; this appears to be a typographical error in the exhibit header .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Gross margins increased to nearly 65% during Q1 compared to just 33% last year, resulting in gross profit dollars increasing by an impressive 132%.” — Joel Fruendt, CEO .
• “These new savings, coupled with the higher gross margins from Evolve are anticipated to reduce the revenue threshold for cash flow breakeven to $7 million annually… we need revenue of just over $1.5 million quarterly to reach breakeven.” — Joel Fruendt, CEO .
• “E‑commerce… is clearly our largest contributor coming in at 61% of our overall Q1 sales… Amazon is going well and is the predominant e‑commerce channel right now.” — Tom Chesterman, CFO .
• “We have now completed nine consecutive full quarters of year‑over‑year revenue growth since I took over as CEO in 2022.” — Joel Fruendt, CEO .
• Other press around the quarter included investor outreach at the Lytham Partners Spring 2025 conference (webcast/1x1s) .

Q&A Highlights

• The quarter’s call concluded without a live Q&A session; no additional clarifications or updates were provided beyond prepared remarks .

Estimates Context

• S&P Global showed no active Wall Street consensus for Q1 2025 EPS or revenue (revenue field only displayed the reported actual), so no beat/miss determination can be made; coverage remains limited for this micro‑cap issuer [Values retrieved from S&P Global].

Key Takeaways for Investors

• Evolve-led mix is structurally lifting margins (64.5% GM) and gross profit dollars, improving path to breakeven as volume scales .
• Channel architecture is working: e‑commerce at 61% of sales with +107% Y/Y growth provides a repeatable, capital‑light growth engine; Amazon is the lead marketplace .
• Municipal deployments moved from pipeline to execution (NYC, Chicago) with other cities engaged—this vector can deliver step‑function orders and operating leverage as programs scale .
• Cost actions ($2M annualized) and automation/facility move underpin lower breakeven ($7M revenue), tightening the gap to positive cash flow if municipal/international orders land on schedule .
• Brick‑and‑mortar remains a slower build; management is using e‑commerce proof points to unlock store placement (e.g., Ace distribution centers), but near‑term growth likely continues to skew online/municipal .
• International growth is a 2H25 lever; approvals in AU/NZ and reorders from prior shipments are key catalysts—timing remains regulatory‑dependent (and hence lumpy) .
• With no active Street consensus, trading may hinge more on company‑specific catalysts (municipal wins, international approvals, margin trajectory) than on headline “beats/misses” in the near term [Values retrieved from S&P Global].

Appendix: Additional Data Points

• Q1 2025 operating detail: Revenue $485K; COGS $172K; Gross profit $313K; OpEx $1.976M; Net loss $(1.665)M; EPS $(1.28) .
• Q4 2024 reference: Revenue $501K; Gross margin 60.9%; Net loss $(1.255)M; Adjusted EBITDA loss $(1.135)M .
• Mix highlights around/preceding Q1: Q4 2024 Evolve Rat 52% and Evolve Mouse 24% of revenue; e‑commerce +206% Y/Y in Q4 .