Sonim Reports Fourth Quarter and Full Year 2021 Financial Results
Sonim Technologies, Inc. (Nasdaq: SONM), a leading U.S. provider of ultra-rugged mobile devices, accessories and solutions designed specifically for task workers physically engaged in their work environments, reported financial results for the fourth quarter and full year ended December 31, 2021.
Fourth Quarter 2021 and Recent Highlights
- Net revenues in the fourth quarter of 2021 were $15.9 million, an increase of 10.4% compared with $14.4 million in the third quarter 2021.
- Net loss in the fourth quarter of 2021 was $11.7 million, compared with a net loss of $10.9 million in the third quarter of 2021.
- Launched unlocked versions of the ultra-rugged XP3plus phone for global markets and versions for Canada with Telus and Bell.
- Secured design win awards from two Canadian carrier customers for Sonim's next-generation ultra-rugged 5G smartphone and PTT-focused feature phone, planned to launch in 3Q
- Ended the quarter with cash and cash equivalents of $11.2 million compared with $10.2 million at September 30, 2021.
- Announced Sonim's XP8 smartphone is now supported by the Walkie Talkie app for Microsoft Teams, offering expanded PTT communications to frontline workers.
- Sonim raised $17.4 million in net proceeds through its at-the-market equity offering program in the fourth quarter of 2021, and does not expect to utilize its at-the-market equity offering program in the first quarter of 2022.
Bob Tirva, President, Chief Financial Officer and Chief Operating Officer: "We are pleased with the response to our XP3plus next generation rugged flip phone that is now available across multiple major U.S. carriers, Canadian carriers, and for the first time in the Company's history, opening worldwide addressable market opportunities for further international expansion. We continued to make good progress with the development of our additional next generation products scheduled for initial release in the third quarter. These additional products include a new 5G rugged smartphone and a feature phone with new features commonly found on radios, making it an ideal solution for the growing Push-to-Talk over Cellular (PTToC) market. With the launch of these additional devices, we believe Sonim will have a fully refreshed line of ultra-rugged mobile devices tailored to large global addressable markets where our unique design features deliver significant value to enterprise and public sector customers."
2021 Financial Results
Revenue for the full year 2021 was $54.6 million, compared with $64.0 million in the full year 2020. Revenue reflected changes in product mix as well as declining sales of certain legacy products in Sonim's product refresh cycle, partially offset by increased sales of flip phones, driven by the launch of Sonim's new XP3plus device.
Gross profit for the year ended December 31, 2021, was $6.4 million, or 11.8% of revenues, versus 23.8% of revenues for the year ended December 31, 2020. The decrease in gross profit margin was primarily attributable to product sales mix as Sonim transitions to its next generation devices. Higher product costs due to supply chain issues, higher shipping costs, and one-time discounting of our scanner line, contributed to lower margins. Sales of the next generation XP3plus and of the XP5s increased in 2021, but were offset by lower sales of the XP8 as it approaches end of life. The launch of an updated smartphone in the third quarter of 2022 is expected to replace the XP8 and increase unit sales of our higher margin smartphones in the second half of 2022.
Operating expenses for 2021 were $44.4 million, versus $44.5 million in 2020. In 2021, lower personnel costs were partially offset by higher R&D expenses associated with developing our next generation products, higher legal expense that is expected to decline in 2022, and one-time bad debt expense. Net loss for 2021 was $38.6 million, compared with $29.9 million in 2020.
Balance Sheet and Cash Flow
Sonim ended the year with $11.2 million in cash and equivalents and remained essentially debt free. Accounts receivable increased to $10.8 million, and inventory was $5.5 million. The company raised an additional $17.4 million in net proceeds through its at-the-market equity offering program during the fourth quarter. The company does not expect to utilize this program during the first quarter of 2022.
As previously announced, Sonim has retained B. Riley as its investment bank to explore strategic alternatives and capital market options, including both buy and sell side opportunities.