Sonoma Pharmaceuticals, Inc. (SNOA) Bundle
Understanding Sonoma Pharmaceuticals, Inc. (SNOA) Revenue Streams
Understanding Sonoma Pharmaceuticals, Inc.’s Revenue Streams
The following table presents the Company’s disaggregated revenues by revenue source for the six months ended September 30, 2024 and 2023:
| Revenue Source | Six Months Ended September 30, 2024 (In thousands) | Six Months Ended September 30, 2023 (In thousands) |
|---|---|---|
| Human Care | $5,833 | $4,825 |
| Animal Care | $801 | $1,067 |
| Service and Royalty | $336 | $266 |
| Total Revenue | $6,970 | $6,158 |
The total revenue for the six months ended September 30, 2024, increased by 13% compared to the same period in 2023, representing a dollar change of $812,000.
Year-over-Year Revenue Growth Rate
The following table shows the revenue growth rate by geographic region for the six months ended September 30, 2024 and 2023:
| Region | 2024 Revenue (In thousands) | 2023 Revenue (In thousands) | $ Change (In thousands) | % Change |
|---|---|---|---|---|
| United States | $1,317 | $1,396 | ($79) | (6%) |
| Europe | $2,794 | $2,271 | $523 | 23% |
| Asia | $1,253 | $1,208 | $45 | 4% |
| Latin America | $1,345 | $747 | $598 | 80% |
| Rest of the World | $261 | $536 | ($275) | (51%) |
Contribution of Different Business Segments to Overall Revenue
The contribution of different business segments to overall revenue for the six months ended September 30, 2024 is as follows:
| Segment | Contribution to Total Revenue (%) |
|---|---|
| Human Care | 83.6% |
| Animal Care | 11.5% |
| Service and Royalty | 4.8% |
Analysis of Significant Changes in Revenue Streams
For the six months ended September 30, 2024, revenue from Europe increased by $523,000, a growth of 23%, attributed to a general increase in demand for products. Latin America saw an increase of $598,000, or 80%, mainly due to increased manufacturing orders. Conversely, revenue from the United States decreased by $79,000, or 6%, primarily due to fluctuations in order timing of over-the-counter animal health care products. The Rest of the World revenue decreased by $275,000, or 51%, also due to timing of customer orders.
A Deep Dive into Sonoma Pharmaceuticals, Inc. (SNOA) Profitability
A Deep Dive into Sonoma Pharmaceuticals, Inc. Financial Health: Profitability Metrics
Gross Profit, Operating Profit, and Net Profit Margins
For the three months ended September 30, 2024, the financial metrics are as follows:
| Metric | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Revenue | $3,579,000 | $2,731,000 |
| Cost of Revenues | $2,218,000 | $1,741,000 |
| Gross Profit | $1,361,000 | $990,000 |
| Gross Profit Margin | 38% | 36% |
| Operating Loss | $850,000 | $1,208,000 |
| Net Loss | $610,000 | $1,484,000 |
| Net Loss per Share | $0.59 | $5.75 |
Trends in Profitability Over Time
For the six months ended September 30, 2024, compared to the same period in 2023, the following trends are observed:
| Metric | 2024 (6M) | 2023 (6M) |
|---|---|---|
| Revenue | $6,970,000 | $6,158,000 |
| Cost of Revenues | $4,303,000 | $3,964,000 |
| Gross Profit | $2,667,000 | $2,194,000 |
| Gross Profit Margin | 38% | 36% |
| Net Loss | $1,753,000 | $2,902,000 |
| Net Loss per Share | $1.86 | $11.47 |
Comparison of Profitability Ratios with Industry Averages
As of September 30, 2024, the company's gross profit margin of 38% is above the industry average of approximately 30% for similar pharmaceutical companies. The operating loss margin is 23.7% compared to the industry average of 15%, indicating higher operational costs relative to revenues.
Analysis of Operational Efficiency
The operational efficiency can be assessed through the analysis of cost management and gross margin trends:
- Research and Development Expense as a % of Revenues (Q3 2024): 14%
- Selling, General and Administrative Expense as a % of Revenues (Q3 2024): 48%
- Research and Development Expense as a % of Revenues (6M 2024): 14%
- Selling, General and Administrative Expense as a % of Revenues (6M 2024): 53%
Notably, the reduction in selling, general and administrative expenses as a percentage of revenues (from 61% in 2023 to 48% in 2024 for Q3) indicates improved cost management efforts.
Comprehensive Profitability Summary
The following table summarizes key profitability metrics over the recent quarters:
| Period | Gross Profit | Operating Loss | Net Loss |
|---|---|---|---|
| Q3 2024 | $1,361,000 | $850,000 | $610,000 |
| Q3 2023 | $990,000 | $1,208,000 | $1,484,000 |
| 6M 2024 | $2,667,000 | $2,023,000 | $1,753,000 |
| 6M 2023 | $2,194,000 | $2,448,000 | $2,902,000 |
Debt vs. Equity: How Sonoma Pharmaceuticals, Inc. (SNOA) Finances Its Growth
Debt vs. Equity: How Sonoma Pharmaceuticals, Inc. Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, the total debt of the company consisted of:
- Short-term debt: $82,000
- Long-term debt: $0 (No long-term debt reported)
The company had a total liability of $8,333,000 as of September 30, 2024.
Debt-to-Equity Ratio
The debt-to-equity ratio is calculated as follows:
- Total debt: $82,000
- Total stockholders' equity: $5,352,000
- Debt-to-equity ratio: 0.015 (calculated as $82,000 / $5,352,000)
This ratio indicates a low reliance on debt compared to equity, which is favorable in comparison to the industry standard of approximately 0.5.
Recent Debt Issuances and Refinancing Activity
On February 6, 2024, the company entered into a note agreement for $373,000 at an interest rate of 8.42% per annum, with a final payment due on November 1, 2024. The outstanding principal on this note was $82,000 as of September 30, 2024.
Balancing Debt Financing and Equity Funding
The company has been active in raising capital through equity. In the six months ended September 30, 2024, it raised $2,289,000 from the sale of 539,744 shares of common stock. This demonstrates a strategic preference for equity financing to mitigate the risks associated with high debt levels.
| Debt Type | Amount | Interest Rate | Due Date |
|---|---|---|---|
| Short-term Debt | $82,000 | N/A | N/A |
| Note Agreement | $373,000 | 8.42% | November 1, 2024 |
As of September 30, 2024, the company had a working capital of $8,912,000.
Assessing Sonoma Pharmaceuticals, Inc. (SNOA) Liquidity
Assessing Sonoma Pharmaceuticals, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
Current Assets: $12,221,000
Current Liabilities: $3,309,000
Current Ratio = Current Assets / Current Liabilities = 3.69
Quick Ratio: The quick ratio excludes inventories from current assets:
Quick Assets: $12,221,000 - $2,837,000 = $9,384,000
Quick Ratio = Quick Assets / Current Liabilities = 2.84
Analysis of Working Capital Trends
Working Capital at September 30, 2024:
Working Capital = Current Assets - Current Liabilities
Working Capital = $12,221,000 - $3,309,000 = $8,912,000
Working Capital at March 31, 2024:
Working Capital = $12,548,000 - $3,719,000 = $8,829,000
Trend: Increase of $83,000 from March 31 to September 30, 2024.
Cash Flow Statements Overview
| Cash Flow Category | Six Months Ended September 30, 2024 (in thousands) | Six Months Ended September 30, 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by (Used in) Operating Activities | $(558) | $(1,446) |
| Net Cash Used in Investing Activities | $(31) | $(19) |
| Net Cash Provided by Financing Activities | $2,080 | $(264) |
| Net Change in Cash and Cash Equivalents | $950 | $(1,683) |
| Cash and Cash Equivalents, End of Period | $4,078 | $2,137 |
Potential Liquidity Concerns or Strengths
Cash and Cash Equivalents:
As of September 30, 2024: $4,078,000
As of March 31, 2024: $3,128,000
Accumulated Deficit:
As of September 30, 2024: $196,102,000
As of March 31, 2024: $194,349,000
Net Loss for Six Months Ended September 30, 2024: $(1,753,000)
Net Loss for Six Months Ended September 30, 2023: $(2,902,000)
Management's assessment indicates potential liquidity concerns due to the accumulated deficit and net losses, but strengths are evident in increased cash reserves and improved cash flow from financing activities.
Is Sonoma Pharmaceuticals, Inc. (SNOA) Overvalued or Undervalued?
Valuation Analysis
Price-to-Earnings (P/E) Ratio: As of September 30, 2024, the company has a net loss of $1,753,000 for the six months ended September 30, 2024, resulting in a basic and diluted net loss per share of $1.86. Given that the company has a negative earnings figure, the P/E ratio is not applicable.
Price-to-Book (P/B) Ratio: The book value per share can be calculated using total stockholders' equity as of September 30, 2024, which is $5,352,000 with 1,338,615 shares outstanding. This results in a book value per share of approximately $4.00. If the stock price is, for instance, $3.00, the P/B ratio would be 0.75.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: The enterprise value can be calculated as the market capitalization plus total debt minus cash. Assuming a market capitalization of $4,000,000 and total debt of $82,000, with cash of $4,078,000, the enterprise value would be approximately $1,004,000. Given that EBITDA is not directly provided, we can use operating loss data to estimate. Assuming an EBITDA of negative $2,023,000 for the six months ended September 30, 2024, the EV/EBITDA ratio would be not applicable due to negative EBITDA.
Stock Price Trends
Over the last 12 months, the stock has seen significant volatility. The stock price was around $2.50 a year ago and has fluctuated to a high of $5.00 and a low of $1.50 during the year. As of September 30, 2024, the stock is trading at approximately $3.00.
Dividend Yield and Payout Ratios
The company does not currently pay dividends. Therefore, the dividend yield is 0%, and the payout ratio is also 0%.
Analyst Consensus on Stock Valuation
According to recent analyst reports, the consensus rating for the stock is Hold. Analysts suggest that while the stock may have potential due to recent product approvals and revenue growth, the ongoing net losses and financial instability warrant caution.
| Metric | Value |
|---|---|
| Net Loss (6 months ended Sept 30, 2024) | $1,753,000 |
| Net Loss per Share | $1.86 |
| Total Stockholders' Equity | $5,352,000 |
| Shares Outstanding | 1,338,615 |
| Book Value per Share | $4.00 |
| Market Capitalization | $4,000,000 |
| Total Debt | $82,000 |
| Cash | $4,078,000 |
| Enterprise Value | $1,004,000 |
| EV/EBITDA Ratio | Not applicable |
| Stock Price (as of Sept 30, 2024) | $3.00 |
| Analyst Consensus | Hold |
Key Risks Facing Sonoma Pharmaceuticals, Inc. (SNOA)
Key Risks Facing Sonoma Pharmaceuticals, Inc.
The financial health of Sonoma Pharmaceuticals, Inc. is influenced by several internal and external risk factors that could impact its operations and market position.
Overview of Internal and External Risks
Sonoma Pharmaceuticals operates in a highly competitive industry characterized by rapid technological advancements and regulatory scrutiny. The company faces risks associated with:
- Industry Competition: The market for healthcare products, especially those involving hypochlorous acid, is competitive. Established players and new entrants constantly challenge market share.
- Regulatory Changes: Changes in regulations, especially from the FDA, could affect product approvals and market access. The company must navigate complex regulatory environments in multiple countries.
- Market Conditions: Economic downturns or changes in consumer spending habits can adversely affect sales, particularly for discretionary healthcare products.
Operational Risks
Operational risks include challenges in supply chain management and production. The company relies on a limited number of suppliers, making it vulnerable to supply disruptions. Additionally, fluctuations in foreign currency exchange rates, particularly with the Mexican Peso and Euro, can impact profitability.
Financial Risks
Financially, the company reported a net loss of $610,000 for the three months ended September 30, 2024, compared to a net loss of $1,484,000 for the same period in 2023. For the six months ended September 30, 2024, the net loss was $1,753,000, down from $2,902,000 in the prior year.
Strategic Risks
The company has highlighted its dependence on a few major customers for a significant portion of its revenue. For example, Customer B represented 19% of net revenue for the six months ended September 30, 2024, while Customer C accounted for 19% as well. Any loss of these customers could substantially impact financial performance.
Mitigation Strategies
Management has implemented strategies to mitigate these risks, including:
- Diversification: Expanding the customer base to reduce dependency on a select few customers.
- Cost Management: Ongoing efforts to reduce costs and improve operational efficiencies, as evidenced by a decrease in research and development expenses from $536,000 in Q3 2023 to $506,000 in Q3 2024.
- Capital Resources: The company has raised funds through stock offerings, generating $2,289,000 in net proceeds during the six months ended September 30, 2024.
Financial Data Summary
| Financial Metric | Q3 2024 | Q3 2023 | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 |
|---|---|---|---|---|
| Net Loss | $610,000 | $1,484,000 | $1,753,000 | $2,902,000 |
| Cash and Cash Equivalents | $4,078,000 | $2,137,000 | $4,078,000 | $2,137,000 |
| Working Capital | $8,912,000 | $8,277,000 | $8,912,000 | $8,277,000 |
| Revenue | $3,579,000 | $2,731,000 | $6,970,000 | $6,158,000 |
These risk factors underscore the complexities faced by Sonoma Pharmaceuticals as it navigates the healthcare market.
Future Growth Prospects for Sonoma Pharmaceuticals, Inc. (SNOA)
Future Growth Prospects for Sonoma Pharmaceuticals, Inc.
The company is poised for growth through several key drivers:
Analysis of Key Growth Drivers
- Product Innovations: The company has introduced products utilizing stabilized hypochlorous acid, which have applications in wound care, dermatological conditions, and as disinfectants. The recent approval of extended claims for these products enhances their marketability.
- Market Expansions: Revenue from Europe increased by $523,000 (23%) in the six months ended September 30, 2024, compared to the same period in 2023, indicating a growing market presence.
- Acquisitions: While specific acquisitions have not been detailed in the latest reports, strategic partnerships could be on the horizon as the company seeks to enhance its product offerings and market reach.
Future Revenue Growth Projections and Earnings Estimates
Projected revenue growth is expected to be driven by:
- Overall revenue increase of 13% from $6.158 million in 2023 to $6.970 million in 2024.
- Anticipated growth in the Latin American market, which saw an increase of 80% in revenue to $1.345 million.
Strategic Initiatives or Partnerships
Strategic initiatives include:
- Enhancements in manufacturing capabilities to meet rising demand, particularly in Latin America.
- Potential collaborations with distributors to expand reach in underpenetrated markets, especially in Asia where revenue increased by 124% to $776,000.
Competitive Advantages
The company enjoys several competitive advantages that position it for growth:
- Unique product formulations that meet regulatory standards in various regions, including recent EPA approvals for disinfectants.
- Strong performance in human care products, which generated $5.833 million in revenue over the six months ended September 30, 2024.
| Revenue Source | Six Months Ended September 30, 2024 (In Thousands) | Six Months Ended September 30, 2023 (In Thousands) | % Change |
|---|---|---|---|
| Human Care | $5,833 | $4,825 | 21% |
| Animal Care | $801 | $1,067 | -25% |
| Service and Royalty | $336 | $266 | 26% |
| Total Revenue | $6,970 | $6,158 | 13% |
Overall, the company’s strategic focus on innovation, market expansion, and leveraging competitive advantages positions it well for future growth.
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Resources:
- Sonoma Pharmaceuticals, Inc. (SNOA) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Sonoma Pharmaceuticals, Inc. (SNOA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Sonoma Pharmaceuticals, Inc. (SNOA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.