Sonim Technologies, Inc. reported significant declines in revenue and profitability for the three and nine months ended September 30, 2024, compared to the same periods in 2023. Net revenues for the third quarter were $15.0 million, a decrease of 46% from $27.6 million in 2023. For the nine-month period, revenues fell to $43.3 million from $80.2 million, also a 46% decline. The drop in revenue was attributed to a transition away from low-margin white label products and the conclusion of sales for certain product lines, including tablets and low-priced smartphones.

Gross profit for the third quarter was $4.2 million, down 24% from $5.6 million in the prior year, while gross profit for the nine months decreased by 29% to $10.1 million. Operating expenses increased significantly, with total operating expenses for the third quarter rising to $6.6 million, a 34% increase from $4.9 million in 2023. For the nine months, operating expenses surged to $21.6 million, up 74% from $12.4 million. This increase was driven by higher sales and marketing expenses, particularly in Europe, and increased general and administrative costs.

Sonim reported a net loss of $2.5 million for the third quarter, a stark contrast to a net income of $0.5 million in the same quarter of 2023. For the nine months, the net loss was $12.0 million, compared to a net income of $1.3 million in the previous year. The net loss per share for the third quarter was $(0.52), compared to earnings of $0.12 per share in 2023.

As of September 30, 2024, Sonim's total assets were $49.1 million, down from $56.0 million at the end of 2023. Total current assets also decreased to $33.9 million from $43.8 million. Cash and cash equivalents stood at $9.1 million, slightly down from $9.4 million at the end of 2023. The company has entered into a Receivables Financing Agreement to facilitate cash flow, allowing for advances up to $2.5 million.

Strategically, Sonim has focused on expanding its product portfolio, including the launch of new rugged mobile devices and connected solutions. The company executed a 1-for-10 reverse stock split in July 2024 to comply with Nasdaq listing requirements and has initiated a sales agreement to raise additional capital. Despite the current financial challenges, Sonim anticipates revenue growth from new product launches in late 2024 and early 2025.