Company: SONM
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001641172-25-022821
Chunk: 73

Company: SONIM TECHNOLOGIES INC
Filing Date: 2025-08-08
Form: 10-Q
Item: Item 2
Chunk 73
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 of 2025 as our production increases to meet demand and
as we launch the product with additional carriers. Third quarter of 2025 revenue for our XP Pro with a thermal camera will be higher
because shipments that were expected to be completed in the second quarter were delayed and were delivered in July of 2025.

Total
net revenues for the six months ended June 30, 2025, decreased by $0.4 million compared to 2024. The six months ended June 30, 2024,
includes $7.7 million in revenue from white label products sold to a related party, and we had no white label revenue in 2025. The six
months ended June 30, 2025, includes $5.5 million related to the expiration of customer allowance agreements as three of our legacy phones
approach end-of-life. Sales of our H500 hotspot that we launched with a U.S. carrier in the second half of 2024 increased revenue in
2025 by $2.0 million. We expect an increase in revenue in the second half of 2025 as our new XP Pro launches with additional carriers,
as shipments of our XP Pro with a thermal camera increase, and after we launch our new HPUE hotspot.

Cost
of Revenues

Cost
of revenues for the three months ended June 30, 2025, increased by $1.8 million as compared to 2024. The second quarter of 2025 included
$1.1 million related to the impairment of contract fulfillment assets, as well as additional costs related to tariffs.

Cost
of revenues for the six months ended June 30, 2025, decreased by $3.7 million as compared to 2024. The six months ended June 30, 2025,
includes $5.5 million in revenue related to the expiration of customer allowance agreements, which had no related cost of revenues. The
six months ended June 30, 2024, had higher cost of revenues from white label product sales that had a cost of revenues percentage of
approximately 94%.

Gross
Profit and Margin

Gross
profit for the three months ended June 30, 2025, decreased by $2.1 million compared to 2024 primarily due to the $1.1 million impairment
of contract fulfillment assets, as well as additional costs related to tariffs in the second quarter of 2025. Gross margin for the three
months ended June 30