Sonendo, Inc. (“Sonendo”), a leading dental technology company and developer of the GentleWave® System, today reported financial results for the quarter and year ended December 31, 2021.

Recent Highlights

• Total revenue of $9.9 million for the fourth quarter of 2021, representing growth of 14%, compared to prior year period
• Total revenue of $33.2 million for full year 2021, representing growth of 42% from full year 2020
• Ending 2021 with 24 Capital Sales Reps and 17 Consumable Reps
• Completed initial public offering in November 2021, and raised $84 million in net proceeds
• Appointed Carolyn Beaver, Karen McGinnis, Raj Pudipeddi, and Sadie Stern to the Board of Directors
• Issued 2022 full year total revenue guidance range of $40 million to $43 million

“We are very pleased with our quarterly results; delivering revenue at the top end of our provided range as well as executing on expanding our commercial organization as promised last quarter,” said Bjarne Bergheim, Chief Executive Officer of Sonendo. “Additionally, we are excited about the progress of our CleanFlow limited market release. We are encouraged by the feedback and data we have received from over 5,000 procedures performed to date and are confident that this latest technology will further establish the GentleWave Procedure as the standard of care for root canal therapy as we continue to commercialize over the course of 2022. This innovation continues to be supported by our strong underlying business that recently achieved a milestone of 800,000 GentleWave procedures performed demonstrating continued adoption and growth.”

Fourth Quarter 2021 Financial Results

Total revenue was $9.9 million in the fourth quarter 2021, an increase from $8.7 million in the fourth quarter 2020. Growth in the quarter was driven primarily by increased utilization among our current install base and increased GentleWave console sales. GentleWave console revenue was $3.1 million in the fourth quarter 2021, an increase from $2.8 million in the fourth quarter 2020. Procedure instrument revenue was $3.8 million, an increase from $3.3 million in the fourth quarter 2020. Software revenue was $2.2 million, an increase from $2.0 million in the fourth quarter 2020. As of December 31, 2021, GentleWave ending install base was approximately 820 units.

Gross margin for fourth quarter 2021 was 25%, compared to 20% in the fourth quarter 2020. The increase in gross margin was driven primarily by a reduction in charges relating to excess inventory and improved overhead absorption.

Total operating expenses in the fourth quarter 2021 were $16.0 million, compared to $13.2 million in the fourth quarter 2020. The increase was primarily driven by sales team hiring and higher general and administrative costs, primarily legal and accounting. This was partially offset by lower research and development expenses.

Loss from operations was $13.6 million in the fourth quarter 2021, compared to $11.4 million in the fourth quarter 2020. Non-GAAP loss from operations was $11.9 million in the fourth quarter 2021 compared to $10.3 million in the fourth quarter 2020. Non-GAAP loss from operations excludes revaluation of contingent consideration, stock-based compensation expense, and depreciation and amortization expense.

Net loss was $13.7 million for the fourth quarter 2021, compared to $12.5 million in the fourth quarter 2020.

Cash and cash equivalents as of December 31, 2021 totaled $84.6 million, while long-term borrowings totaled $30.0 million. The company raised $84 million of net proceeds from its initial public offering, which closed on November 2, 2021.

Full Year 2021 Financial Results

Revenue was $33.2 million for 2021, an increase from $23.4 million for 2020. The growth was primarily driven by increased utilization among our current install base and increased GentleWave console sales. GentleWave console revenue was $8.4 million for 2021, an increase from $4.8 million for 2020. Procedure instrument revenue was $14.4 million, an increase from $10.4 million for 2020. Software revenue was $7.4 million, an increase from $6.0 million for 2020. Growth was primarily driven by an increase in the number of new accounts and increased services.

Gross margin for 2021 was 25% compared to 17% for 2020. The increase in gross margin was driven primarily by a reduction in charges relating to excess inventory and improved overhead absorption.

Total operating expenses for 2021 were $52.7 million, compared to $46.7 million for 2020. The increase was primarily driven by sales team hiring and higher general and administrative costs, primarily legal and accounting. This was partially offset by lower research and development expenses due to lower spending on supplies and services purchased for various projects.

Loss from operations was $44.4 million for 2021, compared to $42.8 million for 2020. Non-GAAP loss from operations was $39.8 million for 2021, compared to $39.0 million for 2020. Non-GAAP loss from operations excludes revaluation of contingent consideration, stock-based compensation expense, and depreciation and amortization expense.

Net loss was $48.5 million for 2021 compared to $46.7 million for 2020.

2022 Financial Guidance

The Company expects full year 2022 total revenue to be in the range of $40 million to $43 million.

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