Financial Performance - Net revenues for Q1 2025 were 9,118,000 in Q1 2024[18] - Gross profit for Q1 2025 was 2,902,000 in Q1 2024, reflecting a significant improvement[18] - The company reported a net income of 2,906,000 in Q1 2024[18] - Net income for the three months ended March 31, 2025, was 2,906,000 in the same period of 2024[24] - For the three months ended March 31, 2025, total net revenues were 16,776 million in the same period of 2024[48] - Total revenues for the three months ended March 31, 2025, were 16,776,000 in the prior year[100] Expenses and Liabilities - Operating expenses increased to 5,591,000 in Q1 2024, driven by higher research and development and sales and marketing costs[18] - Cash flows from operating activities resulted in a net cash used of 168,000 for Q1 2024[24] - Cash and cash equivalents decreased to 5,343,000 at December 31, 2024[16] - Total current liabilities decreased to 43,740,000 at December 31, 2024[16] Assets and Equity - Total assets decreased to 39,739,000 at December 31, 2024[16] - The company’s accumulated deficit improved to (283,608,000) at December 31, 2024[16] - The weighted-average shares used in computing net income per share increased to 5,839,764 in Q1 2025 from 4,438,131 in Q1 2024[18] Product Development and Strategy - The company emphasized the importance of developing next-generation products to meet user needs effectively, which is critical for future growth[12] - A strategic expansion initiative is underway, focusing on new product categories and geographical reach, targeting enterprise and small to medium business segments[27] - The company launched several new products in the first quarter of 2025, including the XP Pro 5G and H500 5G, both certified by Verizon Frontline[28] - The company emphasizes a strong execution strategy in its market expansion efforts, highlighting the introduction of rugged smartphones and connected solutions[27] Revenue Sources - Smartphone sales accounted for 5,580 million year-over-year, while feature phone sales increased to 3,348 million[48] - A significant revenue driver in Q1 2024 was low-priced products developed under the ODM model, which concluded due to the end of their life cycle[29] - One customer accounted for 60% of total net revenues for the three months ended March 31, 2025[102] Receivables and Financing - As of March 31, 2025, net accounts receivable was 4,339 million as of December 31, 2024[53] - The Company has non-trade receivables from manufacturing vendors, with one customer accounting for 23% of accounts receivable as of March 31, 2025[55] - The Receivables Financing Agreement allows the Company to factor receivables up to 290,000, down from 1,262,000 of unamortized stock-based compensation cost related to unvested stock options as of March 31, 2025[80] - The compensation committee approved the acceleration of vesting for 733,157 RSUs as of April 17, 2025[104] Tax and Legal Matters - The effective income tax rate for the three months ended March 31, 2025, was 22.4%, compared to a negative 4.5% for the same period in 2024[83] - The Company is involved in ongoing tax examinations with a gross amount of unrecognized tax benefits of approximately 8,620 million as of March 31, 2025, down from 3,467 million and in the Asia Pacific region was 17,057,000, an increase from 4,497,000 through its At-The-Market stock sales program, enhancing liquidity[34] - The Company sold 1,349,840 shares of common stock under the Sales Agreement for net proceeds of 4,497 million after expenses[103] - The Company issued a promissory note with a principal amount of 71 million related to the promissory note for the three months ended March 31, 2025[73] Shareholder Rights and Dividends - A dividend of one preferred share purchase right was declared for each outstanding share of common stock[105] - Each Right allows the purchase of one one-thousandth of a share of Series A Junior Participating Preferred Stock for $4.00[106] - The Rights become exercisable if a person or group acquires 15.5% or more of the Company's outstanding common stock[106] - The adoption of the shareholder rights plan had no impact on the financial position of the Company to date[107] Company Classification - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[148]
Sonim(SONM) - 2025 Q1 - Quarterly Report