SenesTech, Inc. Q4 FY2024 earnings call

• SenesTech had record financial results in Q4 2024 with 70% revenue growth and 61% gross profit margin, and the smallest adjusted EBITDA loss in company history.
• Implemented initiatives to reduce cash burn by $2M annually, aiming for cash flow breakeven.
• Evolve product drove growth, with expansion into municipal markets (e.g., New York City pilot, Baltimore order), warehousing/distribution, international markets (10 countries with distribution agreements), and e-commerce (Q4 e-commerce sales up 206%).
• Operational efficiencies: pausing new product development to focus on Evolve, bringing marketing/regulatory/IP functions in-house, and optimizing direct sales efforts to reduce cash burn by 30% from $1.5M to $1M per quarter.

For the fourth quarter of 2024, revenue increased 70% to a record $501,000. Breaking down by product, Evolve Rat was 52% of Q4 sales, Evolve Mouse represented 24%, and ContraPest was the remainder. For the year, Evolve Rat was 53% and Evolve Mouse 12%. Q4 Evolve Rat was up 365% from the year-ago period, while Evolve Mouse had no sales in the prior year's fourth quarter and ContraPest was down 51%. E-commerce was the largest channel, accounting for 55% of Q4 sales and up 206% from the year-ago fourth quarter.

• Expect to cut cash burn by about 30% from $1.5M per quarter to $1M per quarter.
• Cash flow breakeven level expected to move to over $1.5M per quarter.
• Strategic financing completed this week provides capital to accelerate progress towards cash flow breakeven.

• Uncertainties in regulatory approvals for international and new market expansions.
• Execution risks related to implementing cost-cutting and operational efficiency initiatives.
• Market adoption risks for Evolve products in various end markets.

Q: About the New York City pilot program and potential growth, A: Joel mentioned NYC will start the project in April with two ten-block areas, and they expect growth by adding more areas as progress is seen.

Q: Regarding sales efforts in the warehousing and distribution channel, A: Joel stated they're moving into warehousing sectors where food supplies are stored, with field tests done and orders being placed.

Q: About e-commerce ad spend, A: Joel mentioned they spend on Google Ads, SEO, and pay-per-clicks to drive e-commerce sales.

Q: About big box retailers and progress, A: Joel talked about Ace Hardware interest, orders up 1000% from a market, and rep agencies representing them at big retailers.

Q: About gross margin and pricing elasticity, A: Joel said they may offer discounts for larger orders from distribution channels and expect to hold margins steady with manufacturing efficiencies.

Q: About manufacturing constraints and efficiencies, A: Tom mentioned they have a supply chain and manufacturing process set to handle future demand, with the new Phoenix facility and focus on automation and cost efficiencies in manufacturing.