What are the key drivers behind any revenue or margin changes (e.g., product launches, regulatory approvals)?

Fundamental drivers:

Sonendo’s Q2 2025 results were largely shaped by the continued commercial roll‑out of its GentleWave™ endodontic platform and the recent FDA clearance of a new single‑use handpiece that expands the system’s case‑mix. The broadened product offering has accelerated adoption in large dental service organizations (DSOs) and specialty endodontic practices, translating into higher unit sales and a modest lift in average selling price as the company captures premium reimbursement rates. Additionally, Sonendo announced the launch of a cloud‑based treatment‑planning software that bundles a subscription fee with each device, creating a recurring‑revenue tail and modestly improving gross margin through lower per‑unit manufacturing costs and economies of scale in the supply chain. The company’s operating expense base remained flat year‑over‑year, so the incremental revenue from these launches directly boosted both top‑line growth and gross‑margin expansion, allowing Sonendo to reaffirm its FY‑2025 guidance.

Trading implications & technical view:

The reaffirmation of guidance, combined with the tangible product‑launch catalysts, underpins a bullish short‑term narrative. On the chart, Sonendo is trading just above its 50‑day moving average and has held a key support zone around $7.20 after a modest pull‑back in early Q3. Volume has been above its 20‑day average on the earnings release, suggesting conviction among buyers. The next technical hurdle is the $8.00 resistance line, which aligns with the 200‑day moving average; a break above could open a pathway to a 15‑20% upside target as investors price in faster margin accretion. Conversely, a failure to sustain above $7.20 would expose the stock to a nearer downside near $6.50. From a trading standpoint, a buy‑the‑dip near $7.20 with a stop just below $6.80, or a partial profit‑take on a breakout above $8.00, would be prudent while monitoring for any further FDA approvals or large DSO adoption announcements that could serve as additional catalysts.