No. of Recommendations: 2
Makers of ruggidized communication equipment. Doubling its revenues to $118 million last year. 64% gross profit.


https://www.sec.gov/Archives/edgar/data/1178697/000119312519...

Now trades at $221 million market cap.
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Do they have more historical data more than the last 2 years?
Revenue was 136 million.

Total revenues from mobile phone sales to AT&T and Group O, a provider for AT&T, were $14.5 million and $54.4 million for the years ended December 31, 2017 and December 31, 2018, respectively. While we do not have access to specific end customer data from our wireless carriers, we believe that the 275% year-over-year growth in revenues derived from sales of mobile phones to AT&T was primarily attributable to the launch of our XP5s feature phone and XP8 smartphone as stocked products at AT&T as well as AT&T’s recent sales activities in the public sector with FirstNet.

Was the increase largely attributed to a one-off huge order from AT&T, who have now stocked up a large off inventory of rugged phones to last them several years? Those 2 phones accounted for 98 million in sales in 2018, 69 million to AT&T and/or their affiliates, or over 50% of sales.


Interesting though. Rugged smartphones that can act like push to talk radios, but replacing the old fashioned radios.

The PTT over cellular network market, such as smartphones on LTE with PTT functions, has been steadily growing and is poised to overtake the LMR market. According to Absolute Reports, in North America, the PTT over cellular market is expected to grow at a compound annual growth rate of 16.8% from 2013 to 2025 compared to 2.8% for traditional LMR.

So market growth of 16.8%.
I imagine it can save companies money by moving from traditional LMR setup, towards rugged PTT smartphones. Their workers still get the communication, whilst also having smartphone capabilities in one device. Also data likely cheaper to run.

We estimate that in the United States and Canada in 2018, there were 37.6 million task workers across verticals in our industrial enterprise end market, including transportation and logistics, construction, manufacturing, facilities management and energy and utility, who could benefit from our products.

Well that's the TAM.

But no quarterly numbers. No historical numbers before 2017. Net loss went from -8 million to now over 1 million after a doubling of revenue. So that's great. If they keep doubling we'll get good scale. At a P/s of less than 2, it must be great value right? Hah! Not if it doesn't grow large enough to start showing us the money.


So the question is, can we expect their growth to continue?
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Makers of ruggidized communication equipment. Doubling its revenues to $118 million last year. 64% gross profit.

From Seeking Alpha:

Sonim Technologies: Rugged Phones, Not A Solid Stock (Yet)

The reality is that the company has seen solid operating momentum in terms of sales, yet despite sales more than doubling last year, operating margins remain dismal. The question is what the current pace of growth looks like and what sustainable margins can look like.


Complete article here:

https://seekingalpha.com/article/4263730-sonim-technologies-...

Jeb
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symbol sonm, went public May 10.

Sheez.

KC
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Ben,

The updated S-1 has estimated for q1 2019 of between 25 and 27 million, up from 18 million in q1 2028.

https://www.nasdaq.com/markets/ipos/filing.ashx?filingid=134...


Personally I’m not interested in this one. I just saw they IPOed with strong revenue growth, which as you say, is possibly temporary.
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Right, so massively slowing revenue growth.

Do you think companies such as Sonim go deliberately go public after huge increases in revenue, in this case essentially a one-off growth spurt, in the hope that they can get a huge pop from the public? Am I being naive pointing this out? Because, of course they do! is the answer I guess. They want to sell their shares at the highest possible price in order to get more funds to fuel more growth.

It clearly didn't work in Sonim's case.
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Going public (IPO) does two things, it helps venture capital to cash out and funds the company. But they better have a good story to sell.

Denny Schlesinger
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