• Revenue: $1.4 million for the first nine months of 2024, up from $898,000 in the same period of 2023.
• Gross Margin: 65% in Q3 2024, up from 49% in Q3 2023.
• Operating Expenses: Down 12% year over year.
• Adjusted EBITDA: Cash burn reduced to approximately $500,000 per month.
• E-commerce Sales: Represented 35% of Q3 2024 revenue.
• Product Revenue Contribution: Evolve rat product accounted for 52% and Evolve mouse for 17% of Q3 2024 revenue.
• International Sales: Nominal in Q3 2024, but significant orders anticipated.
• Warrant Exercise Proceeds: Approximately $2.3 million from the exercise of existing warrants.

• Warning! GuruFocus has detected 4 Warning Signs with SNES.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SenesTech Inc (NASDAQ:SNES) reported record quarterly revenue, driven by the success of its Evolv product line.
• Gross margins improved significantly to 65% in Q3 2024, up from 49% in the same quarter last year.
• Operating expenses decreased by 12% year-over-year, demonstrating improved efficiency.
• The Evolv rat product, launched less than a year ago, now accounts for 52% of the company's business.
• The company is expanding its reach through key online retailers like Amazon and Walmart, contributing to a 20% increase in e-commerce sales in Q3 2024.

Negative Points

• Despite revenue growth, SenesTech Inc (NASDAQ:SNES) is still not cash flow positive, with an adjusted EBITDA loss of approximately $500,000 per month.
• International sales were nominal in the quarter, indicating potential challenges in global market penetration.
• The company is reliant on debt and equity facilities, including an ATM, to fund operations, which could dilute shareholder value.
• Brick and mortar retail sales are still in the early stages, representing only 2% of total sales.
• Regulatory approvals are pending in several states and countries, which could delay market expansion.

Q & A Highlights

Q: Can you talk about the timing as it relates to when you think you might hear from New York City regarding the rat contraception pilot program? A: Yes, it should be soon. We've been going back and forth on a few things and it will certainly be within the next month. - Thomas Chesterman, Chief Financial Officer

Q: What is the current status of your international expansion efforts? A: We have received a multipallet stocking order from our distributor in the Netherlands, which is the largest order in the company's history. Evolv recently received full registration in Hong Kong, and we are close to receiving a container-size stocking order from our exclusive distributor there. We are also nearing registration in Australia and New Zealand and are in the final stages of selecting exclusive distributors in India, Pakistan, Chile, Brazil, and Taiwan. - Joel Fruendt, Chief Executive Officer

Q: How are your e-commerce sales performing, and what are your plans for online retail expansion? A: E-commerce sales, including our own website, Amazon, and DIY Pest Control, represented 35% of revenue during the third quarter. We recently launched on Walmart.com and are in final testing with TractorSupply.com. Overall, e-commerce sales increased approximately 20% in Q3 2024 compared to Q3 2023. - Joel Fruendt, Chief Executive Officer

Q: What are the financial highlights for the third quarter of 2024? A: Revenues for the first nine months of 2024 were $1.4 million, up from $898,000 for the same period in 2023. Gross margins reached a record 65%, up from 49% last year. Our adjusted EBITDA loss is now about $500,000 a month, significantly reduced from previous levels. - Thomas Chesterman, Chief Financial Officer

Q: Can you provide an update on your brick-and-mortar retail strategy? A: We have increased adoption within Ace Hardware and are working to have our products stocked in their warehouses. We are also collaborating with five manufacturers' rep agencies targeting retail hardware chains, representing over 20,000 locations. This represents a multimillion-dollar opportunity. - Joel Fruendt, Chief Executive Officer

For the complete transcript of the earnings call, please refer to the full earnings call transcript.