Earnings call transcript Q1 2023

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Operator

Good afternoon, and welcome to Sonendo's First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded for replay purposes.

I'd now like to turn the call over to Louisa Smith from the Gilmartin Group for a few introductory comments.

Louisa Smith

Thanks, operator. Good afternoon, and thank you for participating in today's call.

are President Sonendo Michael CEO; from CFO. Watts, me Bjarne and Bergheim, and Joining released for financial March Sonendo today, Earlier results XX, the XXXX. ended quarter the A website. of the release available copy press on is company's

Any like to of this Private safe of made harbor to to during include statements federal Before we laws, that of Litigation begin, remind that Reform are make or call the management within expectations statements call the the which this provisions Securities that you Act future management, are our pipeline forward-looking securities and statements, of statements operating assumptions. results our will meaning for XXXX. on pursuant I'd made our in expectations relate on the opportunity, statements. to including future upon current and estimates All COVID-XX financial performance, hiring, guidance, product growth events, forward-looking and or market commercial performance expansion trends impact development organization, back expense those revenue various based business, relating are of forward-looking our predictions

statements these These materially implied statements. reliance and those these cause could you from differ events that by results on uncertainties or statements. not actual place to Accordingly, should undue material forward-looking involve risks

the public please in For annual Factors and and SEC. Commission description uncertainties periodically and XXXX the of our X, Form EDGAR with XX-K business, on filed and on other and Securities report Exchange a of with with our refer list associated Risk the recent available to risks section reports most the filed March

call of only May XXXX. as the contains live is on conference time-sensitive X, accurate This broadcast and information

or information, events or to as except because or otherwise. of Sonendo revise new or required future disclaims obligation, whether intention any projections financial statements, law, update forward-looking by any

will call And now turn Bjarne. the with that, to over I

Bjarne Bergheim

and everyone, afternoon, joining you today. thank Good for us Louisa. Thanks,

some providing business call, comments by and this I will highlights. start opening For

commentary, results Q&A. we will the additional financial detail our before my regarding call Following provide Mike open to

commercial our continue as solid with move plans. execution to to the forward priorities a start and year had we strategic We

team These $XX.X revenue. total growth XX% technology adoption revenue first the quarter. were delivered instrument results by overall CleanFlow year-over-year increased of Our procedure higher our for driven and million in of

the key another of installed achievement milestone, consoles on a our This our the X,XXX GentleWave significant that in base. the we of treated being last patient comes in procedure. first In surpassing heels X year, quarter, achieved over with December millionth

in with strides revolutionize the We our acceptance root both are believe of market and thrilled to technology. and innovation are increase canal making clinical we achievements signal therapy adoption the

X,XXX compared As units of we March approximately units XX, XXX XXXX. the to In as GentleWave was of approximately March sold GentleWave's base XX, quarter, ending installed XX consoles. first

a of GX to last higher the ASP. launch our mix GentleWave led strong doctors higher-volume October, interest well practices. as the in system systems we've This from next-generation has prospective GX to relative customers, console existing those particularly Following seen of GX as higher and

GX progressing oversight assemble an well, third-party sales greater manufacturing. us of supply our initial GentleWave GX, to in To is support strong. expected that working assembly we're growth launch the team to partner demand The remains reports transfer our pipeline from the currently and our our we control and the believe GX give console. and where facility, the Hills enable We in GX this Laguna more will chain stages of that launch the

ensure margin and term. the Additionally, growth a that efficiencies in-market responses will think in allow as feedback console product. accelerate delivery maintaining while installation to near will timely and iterative our co-locating as development and benefits improvements to customer to product well and product This facilitate satisfaction improvement assembly us we produce with will

increase $X.X million, for sales a representing instrument procedure year-over-year. for third As saw totaling XX% sales, we quarter

inventory as some ahead the this of will the surplus of figure that in normalize increase effective second believe purchase we're somewhat significant in price jump February While the we that quarter was by a encouraged X. consumables, customers

fourth CleanFlow considerable PI benefits XXXX driven to our in among from were to pricing conversion consumable margin, gross our The our the program XX% new increase operating in PI improving sequentially to We was increase rates efficiencies to see by production XX% customers, of quarter line. pleased a in QX. and our

profile. As his the improving single to Mike beyond. committed provide growth scale continue more a our instrument, company we'll gross to able further XXXX in throughout and to metric color this later in we comments. towards be procedure recognize remain will margin We

installed in President, on med thrilled chain with welcome Boston of Vice at to incredible earlier over base supply tech strong Vascular margins such in optimization record and gross and focus manufacturing global Systems. this leadership American time combined pivotal with brings and operations supply we a track the as him he support. and improvements, at John improving to has experience spent Abbott including his team be operational Scientific, margins, growing chain our to performance space companies Medical Operations. XX are as John John's Relating role the to and Sonendo years McGaugh proven gross will month in

of tooth and customers stations. full a hosting and CleanFlow in American able extracted booth, had the both were Last drive Association coming the combined hands-on In experience first many of procedure perform our out conference. excitement on privilege GentleWave Endodontists Attendees in the by an were GX the of products meetings for encouraged leading time. this the the were week, have benefits connect with at to and of offering able the we industry to test Chicago our

always are commercial canal of who for perform their the the majority serves endodontists root our at with treatments. with It we on important focus conference. therapy fundamental reminder of reception pleased an strategy We the get AAE our as

the and is key support of X,XXX penetration, and and significant runway to specialty, training in United upon endodontic represent into the continue there sell Based still invest in market leaders clinicians. we in They current to education States will practices the clinical these Canada. in

root performing exists practitioners the that canals the are market recognize in the Canada. opportunity U.S. general and all same time, with who the At of XX% we also approximately

expand practice. begun second have initial commercial This of of the rollout of a half out to stages pipeline within as of early adopters. canal GPs a strategy perform builds measured who year our this into the the further their team treatment sales high will volume root We

these introducing both we seeing clinical As outcomes GentleWave positive we're reception begin and to clinicians, to propositions. the value

support a the and As on begun to seminars among this program endodontists our forward look alike. We GPs GentleWave KOLs we've maintaining both part GPs XXXX are practice. throughout best high and their of committed to a up GP can strategy service in professional and ramping level with developing and of to with to practices network, our hosting capitalize educational bring efficiency establishing

foresee the detailed move like performance, business. the we macroeconomic more at the financial implications look for around some a Before commentary our near-term and I'd into to we provide environment

believe market this this historic Over lags first hesitancy the and of Practitioners we time the cycle are quarter into may pressures choose lengthening to while been last QX. quarter. incentives, to takes to result the cycle. evidenced we've the environment, year-end environment that quarters, the the wherein inflationary proceed creating are in highlighted sales in for as capital a first quarter capital placements several Sonendo, the some And it given uncertainty tax has fourth console of current as that equipment extend in invest a our macro around by

customers' more As are systems hospital purchasers rather in centers owners you typically than businesses. or small see our with personal large a tech weighing corporation, equipment is, ambulatory more business look med capital other than in decision at one than many our see the Therefore, consumer-based more surgery process specialties. other large ways, mindset med customer a might multisite base, common that we tech

dynamics of recognized year, endodontists by the in back and to investing some particularly interest expect of half However, fully we and the to in rates our efficiencies do these able lessen are as normalize appreciate GPs technology. the

team capital believe of macro pipeline And a position of high-quality maintains remains Sonendo sales opportunities significant strong us. a despite I leads. to growth side seize Our in some the is robust pressures upon the before some facing,

We each performance growth asking and financial clearance, of the we in between regulatory market next to CleanFlow benefit for XX are and several our adoption briefly before months, of discuss share. these our XX practitioner rates the to general capture that expanding we Mike further to the to initiatives interior anticipate CleanFlow I'll have presence quarter. poised review the catalysts leveraging

improve directly components to contributes mid-XXXX. instrument from model across is procedure to highlighted is adoption procedure pivotal PI As full our CleanFlow single on while the incentivizes the which efficiency We a still CleanFlow for cases profile pricing an to margin also costly higher to anticipate incorporates improvement CleanFlow boosting a by allows before, our bottom strategy utilization. all manufacture, less line. significantly increased instruments renewed conversion we've fewer use and legacy of The further, operatory revenue. into and

sequential were figure XX%. of And in adoption. PI Our committed fourth approximately over improvement sales of quarter the sales was first remains driving a all that where unit XX% to team the quarter, CleanFlow, XXXX,

market As for considerably We dentists opens the refer over Canada there the out majority believe proposition the we the months. efficiency next a By XX XX value efficacy capture highly to need highlighting to and cohort, Sonendo in are States we XX,XXX the revenues do segment their fraction only this as believe GentleWave of GP within of of a canal the significant to system United that this addressable GP evident. increase not market becomes rollout, the opportunity and root cases. over for the

believe and initial trend that have the continue. this We've received high-volume outstanding will from using GentleWave feedback started accounts

addressed with service and to quality plan same As and rollout the maximize earlier space my is the remarks, in level in we endodontic strategic to GP to implement associated ensure the space. order and measured prepared in Sonendo a that of oversight

instrument capture on able much part CleanFlow And very efficiency teeth anterior of the believe any perform practice. of canal Anterior to approximately And PI finally, we for their this the a more cases. in meaningful this CleanFlow. for development while root of middle teeth further have a of currently year. to root tooth procedure procedure to the be of doctors XX% teeth, is instrument ability we're we The with increase the of to for the ability our that canal XX% to market looking single has and commercialization a we'll anterior represent a through forward

procedures excited opportunities PI, greatly We'll provide even dedication With and our far. further we'll on We're inflection. commercial and anterior about team's I'm a able enjoy further thus for us, strategy future economies many our will call. one single ahead margin of of hard to improve, proud growth be the of scale our on work details and

to I turn over call Watts, our quarterly performance Mike? that, With Officer, Sonendo's will Chief Financial the Michael discuss numbers. to

Michael Watts

Bjarne. Thanks,

procedure increased total XX%. in of well $XX.X the quarter in XXXX, segment sales primarily driven growth As with million an product for instrument revenue product Growth was compared the revenue. of first of first $X the to of million segment, XX%, mentioned, quarter by Sonendo for XXXX other previously as quarter as was increase our

In roughly to the in XX however quarter, decline in sold to Average GX to console grow GX installed increase was quarter, the XXXX. with expect as upgraded to and million the macroeconomic decision-making million the attributable existing console revenue $X upgrades the mix. discussed to to year the quarter XX in full from a price console related of in base. who favorable being console ASP previously first revenue, revenue to to $XX,XXX attribute GentleWave higher resulting modest, GentleWave the GX $X.X with GX impact consoles customers and for X on process, and XXXX. We for the was first our selling systems, of net to the compared We

procedure to base, period. the XXXX, XX,XXX. approximate at X% an prices revenue an our the the our the note that month to Procedural in field attributable in exceeded GentleWave in increased was our totaled growth increase prior PI of quarter, procedure to quarter sold lower during sales instruments we the by quarter primarily to level, of compared price was In increase the first installed customers $X.X year buying out million revenue approximately PI instruments did and the sold approximately in a at utilization the XX%. January. Turning selling of million driven average compared $X.X instruments.

of will QX X% be to and Our sales reflected PI that in QX. estimates are during X% lower demand out QX approximately

revenue and in for in first practices. the million favorable quarter product-related to perform other of $X.X first of software Total group million was the quarter quarter. TDO XXXX, continues was $X well $X an Total million gave traction the revenue to XX%. in increase compared

offset cost This the increase for XXXX XX% first by somewhat procedural was Gross improvements rates, margin increased, as along as XXXX. quarter the CleanFlow compared to unit with instrument in XX% of console. driven initial higher increased quarter ASPs adoption CleanFlow operating of first efficiencies of as the production by was gained well in GX

efficiencies this and we are conversion pleased seeing us to in focus in are and further be inflection as for margins the Improving to production year-over-year continues margins instrument. We line our positive CleanFlow consumables very a with with both sequentially XXXX.

in Total and the offset first relating million Increases $XX.X driven were administrative XXXX same to recruiting were the the by spending. of operating compared period commercial and of $XX.X primarily and costs to stock-based related our million compensation, expenses general R&D expansion year. lower and legal expenses to higher expenses, higher quarter prior by related revenues partially in

in Loss the the XXXX. XXXX was was the first first quarter quarter from in quarter first XXXX $XX.X to operations compared of first for of the Net $XX.X $XX.X XXXX. of million million in of million $XX.X quarter compared loss to million

long-term XXXX at March of our Our equivalents cash borrowings were million, and approximately remained cash as $XX.X million. investments while $XX short-term and XX,

release, our Retention April of million of of in during $X.X we this to received year, recognized in million subsequent the Employee noted earnings $X.X end, the As XXXX. QX Credit

financial practice quarterly for to the around initial XXXX. provide dynamic our quarter not And environment, it light we full believe in it we As are year. to guidance helpful our our second million is some would while of macroeconomic $XX of between XXXX provide the million of the parameters annual estimates for and be guidance, $XX maintaining revenue

of expecting analysis margin to ramp between our to most economic sales customers. in-house console. recent for reflect and cycle QX of and we amongst our For revenue $XX.X with as the GX in gross These underlying line QX, million up are $XX be figures we environment million range concerns and our production

this point, to call the questions. At for up like I'd open

Operator

[Operator from from Instructions] Our Jon Stifel. comes first question today Block

Tom Stephan

start is of year maintain I short thing, but guidance. you This phasing the yet off sales, 'XX shifting our guidance. is little Tom year Stephan the was on with for think, there full some in [one to Understand John. wanted of I full a the estimate collectively],

on easing XH of So the of are macro is we you we comfortable I potential some what a key how Bjarne, guess but about? the are called can you than be steeper elaborate I you should XH bit which a ramp, with thought? thinking bit previously out the guess considerations implied uncertainty,

Bjarne Bergheim

Bjarne. is this Tom,

out looked COVID impact the shows conventions ways to shows we shows year. you I sell. of sell. Dental I throughout efficient these true would If And trade to companies is more muted. much that efficient specifically, sell before running that's cycles one that things trade impact that have COVID, more have dental more education especially and that ways found found Sonendo think noticed the the more had for for sales the And say are how after we have is and in trade professional an example, -- have outside to of of figured events

of of what you have If pipeline the strong in we pipeline look very we have, a deals.

the forming. And GPs. at look we're very as -- to how increasing pipeline with is the that so we're pleased now pipeline is starting and We

recognize talked of pipeline, to of the in of we're for we prepared the and do our because the continue is why guide strengthening the the we So that's we pipeline, strengthening year. -- the about [remain] why macroeconomic remarks. But that the that overall continued backdrop

continued end think awareness. we're how continue continuing we be through And continuing through. of pipeline activate to We're year, activate sales the I to much incentives of to of education get play see that year we the we very the do on tax large. thing sales. closer that is to and to now is The top end expect as the we the

healthy. demand healthy. The continues to So be pipeline to continues be

growth just inform fact just the very inform of have to wanted believe very, opposed in that impact why slightly less sales do our and traditionally are see as more the to would in shows about that's cycles. an And QX COVID. seen QX be trade that the of and to We continue everyone we story. market long-term excited will QX, QX being than we higher you before We that have line

Tom Stephan

elaborate then sense. if makes and the sustainability the margin, the of on strong very once on think sequential you gross in drivers And quarter can is expecting, Maybe question you given called about just completed, 'XX And bps those my just then you're That out. you the clean mentioned. a second is factors gross past what saw XX% manufacturing just the margin growth the this XH transition we of we exiting year, maybe once get that XXX we the quarter? can appreciate

Michael Watts

Tom, add any it's Mike. commentary I'll that start take as that Bjarne question, well. then I'll and let -- color

our some albeit pleased got with achieved higher of the then very exited we the we GX line, unit yes, largely were are how cost and increase the QX, XX%. offset price to from favorability additionally So PIs with consumable by able drop we that somewhat We production console.

to you XX%. QX, We're that the exit So we And first starting GX well, remarks QX expecting as roughly we're for as to to up production. in your -- in indicated continue. at half dynamic ramp tend QX

I there's the what in terms we'll guidance through a improvements further on number, we're think experience is year, specific believe cost of working without we giving of for GX. that in-sourcing

that push think ramp QX that expect to be favorability We've the from up number give CleanFlow ramped then able we that XX%. we'll up. to to up So XX% we QX further. from additionally, to will around adoption, And us

effect price then expect in remaining still And the have that the will PIs we we that increase improvement. take quarters. So for full

the of form. we we the that have that into second will north a in us year XX% of think a So help going favorable half lot positive of trend momentum

Bjarne Bergheim

high driving life. is John McGaugh has priority previous This now, he done onboarded excited being in And really have for heading course, to what operations. very margin, his Tom, of We're us.

a is, leverage. continue to will key cetera, et material as we Mike convert as and a driving cost, company, managing negotiations, whole, priorities to And opportunities of key mentioned us, And customers costs, course, CleanFlow. operational for some of supplier obviously, his like

So something we forward. will that's go as be that all to definitely over continue

Operator

question comes Our Downing Sandler. Piper from Joseph next from

Unidentified Analyst

Jason. for [ph] John is This

So year's feedback CleanFlow. what AAE success to conference versus year, showcase, year? but can you party This out from this last last the had or for year coming was compare you had the you GX

to trying the notable the just versus there get a So X conference. sense a year if other around was in difference

Bjarne Bergheim

that and about on also also very would I I a question. I most really very, level activity were available super Yes. we we technology canal a for the the that for we anyone let a the else, Thank But AAE. need that environment, I patients. you had if not, excited believe GentleWave would I important, year's can that say, clearly say And us. we first, had root this floor. best clearly also representing busy anything option great booth, have best people family show We my team professional endodontics very for and for say, tell the would do you know, we I see this I for procedure. but and would have in myself,

new to taking So really endodontics a level.

do disinfect I Sonendo we the is I'm how has of and convention the what that initiated we've canals. And will to in forward. these continue and would go years, go that led clean file to say seen conversation about to and say see so Second, file use less and XX Instead what years, to talking these that proud entire and going this to conversations how really endodontics. talking back about root now to back X change you we talking -- files clearly AAE, about year's continue if if you

during us to third observation, speak of show. the I what the before heard is obviously, And we would to that. that pattern this I say, that point ripe walking about a of we is is was another that some number to going lead recognition. disruption field year's this this They've believe for come dynamic them seen and show there's AAE Effectively, saying at a very one floor. us the that's Maybe going here they're investors this Sonendo continue is that talk to And things and from forward. different had

We didn't though time. AAE, we [John], So didn't point, GX to obviously, did CleanFlow. for showcase, first net have from takeaway even didn't this the launch -- we year's have, we your

have best offering We in endodontics. the

to very is this field feel in We And field. will this this that lead disruption. for continue we ripe -- ripe is a very

think year's COVID. impact conferences, trade we seeing both good So earlier general in is say I would saw we year may us. last about both less that conference, that what for like have just this that conference, But shows before we're than talked that was we

really I and successful. So prior wouldn't that the goes year's AAE, last less We a back on did this comments. very so -- now that my the see just year's pre-COVID business after in to say we would than very, COVID impact environment, I AAE,

Unidentified Analyst

any Great. of there's into And then what's whether I appreciate this regarding the that early to feedback any draw thoughtful focus? with say push endo channel? Are answer. there the expanded your the unhappy from? being And been GP core doctors selling lessons can been early you evidence

Bjarne Bergheim

all I the going very be Yes. The over have been we We something push on very to that the still penetration XX% on is into space. than really well. channel, be the earlier, we much less focused think, focused that. GP into all wanted endodontic about talked and to endodontist. continue This Like we've along, we've is

be So a to this will significant focus for continue us.

point supporting this KOLs we key at have us. also in in time, endodontics the And

is good on that XX% over like all prior so the to as GP So of moving why talked about we've believe, we in about well. roughly the GPs procedures. really do start to and timing, commentaries, focusing But that's space endodontic

building the drive stages. It's out awareness. We're clearly So the is But the tools the -- we're increasing. in pipeline still GP in that going the and see space well. we education GP early to

help So continue drive -- the to year. this the of further drive growth second should in half

the is and messaging GPs conflict not both to that without being endodontic other. will, with to conversation each maybe messaging the with conflict each I that. endodontist in And we in things the parties, of think one other in to our unique have we if Sonendo seen GPs have that's can talking our in with you continue and that regards both field, blowback other. the them With room, not you're words, any are the about In if to the have endodontists same for we

their Now GPs, to about for are that's selling GPs we're we're the when To own in referred them but GPs, that being awareness the very meaning, the that treating GPs high-volume that unit are the benefits GP not space, knows substantially to cases, patients the would are the offers that course, in by keeping referring the help because endodontist, that think, either selling of the the a to we buy positioning no GPs. GP with obviously, out rest I to instances conflict, if conflict someone to obviously a and and of about providers endodontist refer they'll we're that endodontist. or them of both talking all ultimately GentleWave. extent, a us their in-house the driving actually of significant and, in GentleWave, the and to that there's have lot the cases I whereas, the our they'll Both say things, and both storytelling us, educating

Operator

Our comes Nathan Rich from next question Goldman Sachs. with

Nathan Rich

bit think between impacted of just going I a was color the model I on guidance. and the expect quarter. little ask wanted ASP that the And more console the a forward Mike, continue console on how on XQ by think we as dynamic some Is I to you revenue? this trade-ups revenue, would maybe that about provide to guess, you specifically composition could PI? consoles XQ to revenue

Michael Watts

Great. Thanks, Nathan.

with we from people in or the saw look saw a buy-in what that QX, PIs the you PI of X% we QX, was stocking when effect just tried out, start-up. anywhere highlight at to where to had X% where sales So we

in QX. happening the it So of with and we work expect that QX out to in QX majority itself

PI So to QX that, in QX sales think step happen we on that that will from impact. out down

not When you talking won't don't the we're programs at trade-in QX, we -- trade-in we to QX any had forward. We but into offer you're -- trade we something from continue had moving those any the over don't QX, done actively special and we deals dynamic looking or trade that at it's some offer consoles, of move up that up, and look about in with today.

So the you straightforward that's if ASP expect have to at you'll something somewhere in QX, you little mid-XXs. land We a a cleaner, the look in still will, ASP.

mid- XXs, put that's models on to into ASP low So to the for consoles. something

Bjarne in but for as the then volumes, as there'll be past. QX, not seen indicated, much you QX when and at slight And there, look as we've QX, variations

than be in QX bit then between more place little be So some and and QX QX will will QX a QX.

I hope So that helps.

Nathan Rich

be Yes. terms No, of in Appreciate rollout? terms all capacity the is market? think place? this in-house, guess, great. to to roll ability of of at does as And number that position the we to in out think GX how a that's pace just rollout the of kind that there. you'd GP the assembly I that factor channel of you consoles in then us guess, supply the And of about the limiting to I your guess, change that color a the bringing and about I can help

Bjarne Bergheim

we're more in-house. little a bringing Yes, you give bit question. maybe Nate, that's me color a why good let And manufactured on back

and exclusively on to the units. GX. first us the helped get GX work same But to us help previously, GX, create obviously, Sonendo manufacture et manufacturing at lay constructions, we we've up focused And an for manufacturer order in us running, few manufacturer OEM here has So out this manufacturing team plans, cetera. OEM before the had line, used

is of that's We double-clicking and And XX-XX a higher I which demand we've seeing GX, ask think than previously GX really we to good. about talked GX. Today, your on -- the demand GX on demand split between question a starting about prior rationale for and also are GX here. expecting calls, -- about

at Sonendo, the GX manufacturing to team here back manufacturing So bring utilize in in-house. order decided we've to

laid team GX manufacturing entire now the with up a production We're that making have out here. are ramping line units. We

expensive. California, supplier was was OEM in based And also here

we also manufacturing be close of in-house, have think quickly can we're because dollars. we're to in to manufacturing, important our to R&D so by margin it's manufacturing And important bringing team. early manufacturing And close to done. close to So needs ramp moving some anything that R&D, the saving customers iterate I that's really

earlier, course, here And I forward. this John of like to going is about also a heading this think to in-house help I talked for going us operations, key drive now, be having really

So we to we feel market. sufficient that we supply -- the have here have feel Nate, supply we

feel here We not and have to endodontist here, to have channel help we a team the sufficient the to that supply GXs GP drive but we just manufacturing as capacity great also well. community to internally

Operator

question next Stanley. Erin at comes Wright Our from Morgan

Erin Wright

purchasing. And getting macro or base is ending what's worse? How your right highlighted characterize the for target how environment equipment duration would better cycle characterize now, impacting capital And again now? sales installed would it the the year? So you you you it

Also, placements Was how measured if were it's GP? that you approach, break was out. but with it, get at a curious curious all? could just I associated many I material just that

Bjarne Bergheim

can in So take Mike of Erin, part that, I'll more and here. fill some detail

equipment the say So us that would I the is for environment same. capital

We have not a seen quarters. prior from worsening

say it's stable. would I that So

like in And the Like is a I given this duration Mike initially, the the the The of less. the previously But in have GP some the longer year be GPs of numbers I'll is impact your we've would But for environment communicated, year. the point, that we end cycle previously talked slightly half numbers, have with towards about, of to of regards is to have to -- this first going say macro this on we console strong overlay. growing. pipeline sales pipeline. comment

seeing start year. more to that going some of this You're

this for call think right, is growth way in continuing endodontists. here. about on we're There's us a year, Another specialty opportunity to field significant available the in to the

less have of than We market. XX% the

upside, -- year. and be us. then this will, will half grow, to if key to we the GPs provide you continue for into that be second continue as to of drive will a focus continue that So And will

Michael Watts

just the and -- So on installed comment, questioning. going your to just base line I continue GP guess, in of backwards

So for that our XX% of base. less GPs, right now, than is install

give they've meaningful, this a out and to on GPs and we with first in more it. So install starting on color process we certain add launched we can to had now with when stuck had -- we're through of as started we it. that it becomes XXXX, to more But base this, start this

Regarding for the on year-end. question second install our base

in given base. consoles we the increase for install year that guidance implied So that placed year, the to XXX last is we've and

PIs grow So to it's in market. just course, the grow and GentleWave to the our base help expand goal, the footprint install of

your So question. hope that helps

Operator

from with comes Bank Cherny question America. next Our of Michael

Dan Clark

Dan Mike. Clark for is This on

more Just of cycles difference the consumer-based how you groups? gave one if you're Appreciate between macro taking are sales there's here sort seeing customers us. two say color differences and your and looking GPs a at any mindset on in guys from around macro. you the of Would between endos a

Bjarne Bergheim

Good question.

in is our I here they smaller on more because of and a spot framing something making thing. should sole taking from from your about think something consumer I do they're decision are are should that they're a I type purchasing home my do or customers our you're proprietors mindset smaller, business -- of

that's, very So very, think, I framing. a good

anecdotal GP ROI also office resonates I very some we're a in in I we this an general, early more would think at What it's early that perspective. give an versus a GP GPs more from business-minded much other into value too in are bit also proposition are, that have in the in that insight endos than office. indicate some perhaps And GPs resonates units, looking early decisions are a that in And this have say GP seeing are probably that we little to little office, consoles that we experiences and a well. installing at seeing endodontic GentleWave point results time. bit we with the it seen

And right, as focused during all on be canal patients one substantially reflect dentist, upon a and endodontist An you be kind you will of to working at on root can time. can multiple will patient activities a multiple procedure. the the same all -- going GP as

what think doing a because seeing prop is I resonates quite continue So they GentleWave to we're that procedure, that GPs, work a value bit. while patients on multiple actually can

our that's in capital perhaps bit -- equipment for that's open GPs the a this more time. rationale little So -- to being at acquiring

Operator

to back and Bjarne hand President for any now I Bergheim, CEO, remarks. final Q&A. our concludes This

Bjarne Bergheim

interest you, of day. great for you. We a appreciate in thank you Sonendo. everyone's Have rest Well, and time operator. your thank your today, Thank

Operator

Ladies your call We'd thank for has and gentlemen, participation. concluded. to now like you today's

your You may now line. disconnect

Sonendo (SONX) 9 May 232023 Q1 Earnings call transcript