Sonim Technologies Announces First-Quarter Financial Results
Friday, May 15, 2020 | Comments

Sonim Technologies reported financial results for the first quarter ended March 31, 2020. Net revenues were $12.7 million, gross profit was $2.2 million and GAAP net loss totaled $10 million.

Net revenues for the first quarter of 2020 decreased 52% to $12.7 million from $26.5 million in the first quarter of 2019. The decrease in net revenues was primarily attributable to lower volumes of devices sold because of one key U.S. carrier that completed a prior minimum required purchase agreement in 2019. Sonim is now selling through existing inventory in collaboration with that carrier while also increasing sales through other customers and channels. Sonim expects the carrier to complete the sell through of existing inventory and become a purchaser of additional devices again in 2020 as it continues to expand its business with the company.

Gross profit for the first quarter of 2020 decreased to $2.2 million or 17% of net revenues from $9 million or 34% of net revenues in the first quarter of 2019. The decrease in gross profit was primarily attributable to overhead related to the temporary shutdown of the firm’s manufacturing facility in Shenzhen, China, in the first quarter, a one-time event that artificially increased cost of goods in the quarter.

Operating expenses for the first quarter decreased by about $2 million compared with the prior year first quarter, and by about $3 million excluding restructuring charges. This reflects the company’s ongoing work to reduce operating costs.

Net loss for the first quarter of 2020 totaled $10 million compared to net loss of $5.1 million in the first quarter of 2019.

"We are hopeful that the first quarter will be the trough in our ongoing transformation of Sonim into a growing rugged mobility business driven by a leaner, lower cost team focused on the path to profitability," said Tom Wilkinson, CEO. "Like most businesses, the COVID-19 pandemic caused some disruption to our operations in the first quarter, including a three-week closure of our factory in Shenzhen, and will continue to have an impact on our supply chain. Despite these challenges, we are expecting an increase in demand in the second quarter and can now focus on quarterly sales to a broader range of carrier and enterprise customers.

"While the COVID-19 pandemic continues to generate a great deal of uncertainty in any forecast, we presently anticipate revenue and gross margin improvement in the second quarter, relative to the first quarter while maintaining our focus on lean operations and cash efficiency. Additionally, operational changes implemented over the past few months have enabled the company to grow its cash balance to $12.4 million at the end of Q1 2020. This added liquidity will help the company drive future product development."

As of March 31, manufacturing operations were once again fully operational. Sonim was designated an essential supplier by a major U.S. carrier that provides critical services to ensure first responder critical communications remain functional. Select Sonim staff have traveled to support critical deployments of Sonim mobile devices for emergency management services and other agencies.

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