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    Sonos Reports Second Quarter Fiscal 2024 Results

    5/7/24 4:05:00 PM ET
    $SONO
    Consumer Electronics/Appliances
    Consumer Staples
    Get the next $SONO alert in real time by email

    Company reports solid first half, on-track to achieve Fiscal 2024 guidance

    Sonos, Inc. (NASDAQ:SONO) today reported second quarter fiscal 2024 results.

    "Thanks to the hard work of our team, and the strength of our brand and product portfolio, we delivered results that slightly exceeded our expectations in our second quarter despite the challenging environment," Sonos CEO Patrick Spence commented. "Today marks the launch of our completely reimagined Sonos app, which is our most extensive app redesign ever. This is a major step in enabling our multi-year product cycle and sets us up well for the launch of our highly anticipated new product later this quarter."

    "Our Q2 results show our commitment to execution. With a solid first half behind us, we are well positioned to deliver on our Fiscal 2024 guidance," said Sonos CFO Saori Casey.

    Second Quarter Fiscal 2024 Financial Highlights (unaudited)

    • Revenue of $252.7 million
    • Gross margin of 44.3%
    • GAAP net loss of ($69.7) million, GAAP diluted loss per share (EPS) of ($0.56)
    • Non-GAAP net loss1 of ($42.1) million, Non-GAAP diluted EPS1 of ($0.34)
    • Adjusted EBITDA1 of ($33.6) million

    Notes:

    (1) Non-GAAP net loss/Non-GAAP diluted loss per share (EPS) and Adjusted EBITDA exclude stock-based compensation, legal and transaction related fees, amortization of intangibles, and restructuring and abandonment costs. See "Use of Non-GAAP Measures" and reconciliations to GAAP measures below.

    Maintaining our Fiscal 2024 Outlook

     

    Low end

    Midpoint

    High end

    Revenue ($ million)

    1,600

    1,650

    1,700

    % y/y

    -3%

    0%

    3%

    % y/y - constant currency

    -3%

    0%

    3%

     

     

     

     

    Gross margin - GAAP

    45.0%

    45.5%

    46.0%

    Adjustments(1)

    0.4%

    0.4%

    0.4%

    Gross margin - Non-GAAP(1)

    45.4%

    45.9%

    46.4%

     

     

     

     

    Adjusted EBITDA ($ million)

    150

    165

    180

    Adjusted EBITDA margin

    9.4%

    10.0%

    10.6%

    Notes:

    (1) Non-GAAP gross margin excludes approximately $7 million (0.4% of revenue) of stock-based compensation and amortization of intangible assets included in GAAP gross margin

    Supplemental Earnings Presentation

    The company has posted a supplemental earnings presentation accompanying its second quarter fiscal 2024 results to the Earnings Reports section of its investor relations website at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports.

    Conference Call, Webcast and Transcript

    The company will host a webcast of its conference call and Q&A related to its second quarter fiscal 2024 results on May 7, 2024, at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). Participants may access the live webcast in listen-only mode on the Sonos investor relations website at https://investors.sonos.com/news-and-events/default.aspx.

    The conference call may also be accessed by dialing (888) 330-2454 with conference ID 8641747. Participants outside the U.S. can access the call by dialing (240) 789-2714 using the same conference ID.

    An archived webcast of the conference call and a transcript of the company's prepared remarks and Q&A session will also be available at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports following the call.

    Consolidated Statements of Operations and Comprehensive (Loss) Income

     

     

    (unaudited, in thousands, except share and per share amounts)

     

     

     

     

     

     

     

     

    Three Months Ended

    Six Months Ended

     

    March 30,

    2024

    April 1,

    2023

    March 30,

    2024

    April 1,

    2023

    Revenue

    $

    252,662

     

    $

    304,173

     

    $

    865,531

     

    $

    976,752

     

    Cost of revenue

     

    140,624

     

     

    172,555

     

     

    470,815

     

     

    560,078

     

    Gross profit

     

    112,038

     

     

    131,618

     

     

    394,716

     

     

    416,674

     

    Operating expenses

     

     

     

     

    Research and development

     

    80,322

     

     

    80,785

     

     

    159,557

     

     

    157,726

     

    Sales and marketing

     

    61,835

     

     

    63,621

     

     

    145,785

     

     

    142,317

     

    General and administrative

     

    40,841

     

     

    44,438

     

     

    80,639

     

     

    87,553

     

    Total operating expenses

     

    182,998

     

     

    188,844

     

     

    385,981

     

     

    387,596

     

    Operating (loss) income

     

    (70,960

    )

     

    (57,226

    )

     

    8,735

     

     

    29,078

     

    Other income, net

     

     

     

     

    Interest income

     

    3,933

     

     

    3,181

     

     

    7,008

     

     

    5,149

     

    Interest expense

     

    (122

    )

     

    (152

    )

     

    (227

    )

     

    (311

    )

    Other (loss) income, net

     

    (3,303

    )

     

    (2,832

    )

     

    6,971

     

     

    20,745

     

    Total other income, net

     

    508

     

     

    197

     

     

    13,752

     

     

    25,583

     

    (Loss) income before (benefit from) provision for income taxes

     

    (70,452

    )

     

    (57,029

    )

     

    22,487

     

     

    54,661

     

    (Benefit from) provision for income taxes

     

    (743

    )

     

    (26,377

    )

     

    11,249

     

     

    10,124

     

    Net (loss) income

    $

    (69,709

    )

    $

    (30,652

    )

    $

    11,238

     

    $

    44,537

     

     

     

     

     

     

    Net (loss) income attributable to common stockholders:

     

     

     

     

    Basic and diluted

    $

    (69,709

    )

    $

    (30,652

    )

    $

    11,238

     

    $

    44,537

     

     

     

     

     

     

    Net (loss) income per share attributable to common stockholders:

     

     

     

     

    Basic

    $

    (0.56

    )

    $

    (0.24

    )

    $

    0.09

     

    $

    0.35

     

    Diluted

    $

    (0.56

    )

    $

    (0.24

    )

    $

    0.09

     

    $

    0.34

     

     

     

     

     

     

    Weighted-average shares used in computing net (loss) income per share attributable to common stockholders:

     

     

     

     

    Basic

     

    123,749,605

     

     

    127,952,875

     

     

    124,465,661

     

     

    127,582,560

     

    Diluted

     

    123,749,605

     

     

    127,952,875

     

     

    128,206,823

     

     

    132,834,096

     

     

     

     

     

     

    Total comprehensive (loss) income

     

     

     

     

    Net (loss) income

     

    (69,709

    )

     

    (30,652

    )

     

    11,238

     

     

    44,537

     

    Change in foreign currency translation adjustment

     

    (85

    )

     

    4,542

     

     

    (948

    )

     

    (2,684

    )

    Net unrealized loss on marketable securities

     

    (26

    )

     

    —

     

     

    (26

    )

     

    —

     

    Comprehensive (loss) income

    $

    (69,820

    )

    $

    (26,110

    )

    $

    10,264

     

    $

    41,853

     

    Consolidated Balance Sheets

    (unaudited, in thousands, except par values)

     

     

    As of

     

     

    March 30,

    2024

     

    September 30,

    2023

    Assets

     

     

     

     

    Current assets:

     

     

     

     

    Cash and cash equivalents

     

    $

    245,962

     

     

    $

    220,231

     

    Marketable securities

     

     

    45,598

     

     

     

    -

     

    Accounts receivable, net

     

     

    69,725

     

     

     

    67,583

     

    Inventories

     

     

    179,545

     

     

     

    346,521

     

    Prepaids and other current assets

     

     

    42,077

     

     

     

    25,296

     

    Total current assets

     

     

    582,907

     

     

     

    659,631

     

    Property and equipment, net

     

     

    88,236

     

     

     

    87,075

     

    Operating lease right-of-use assets

     

     

    51,594

     

     

     

    48,918

     

    Goodwill

     

     

    81,303

     

     

     

    80,420

     

    Intangible assets, net

     

     

     

     

    In-process research and development

     

     

    71,235

     

     

     

    69,791

     

    Other intangible assets

     

     

    17,243

     

     

     

    20,218

     

    Deferred tax assets

     

     

    1,638

     

     

     

    1,659

     

    Other noncurrent assets

     

     

    31,459

     

     

     

    34,529

     

    Total assets

     

    $

    925,615

     

     

    $

    1,002,241

     

     

     

     

     

     

    Liabilities and stockholders' equity

     

     

     

     

    Current liabilities:

     

     

     

     

    Accounts payable

     

    $

    121,497

     

     

    $

    187,981

     

    Accrued expenses

     

     

    72,241

     

     

     

    89,717

     

    Accrued compensation

     

     

    38,470

     

     

     

    22,079

     

    Deferred revenue, current

     

     

    20,692

     

     

     

    20,188

     

    Other current liabilities

     

     

    50,317

     

     

     

    34,253

     

    Total current liabilities

     

     

    303,217

     

     

     

    354,218

     

    Operating lease liabilities, noncurrent

     

     

    51,984

     

     

     

    54,956

     

    Deferred revenue, noncurrent

     

     

    62,616

     

     

     

    60,650

     

    Deferred tax liabilities

     

     

    9,972

     

     

     

    9,846

     

    Other noncurrent liabilities

     

     

    3,822

     

     

     

    3,914

     

    Total liabilities

     

     

    431,611

     

     

     

    483,584

     

     

     

     

     

     

    Commitments and contingencies

     

     

     

     

    Stockholders' equity:

     

     

     

     

    Common stock, $0.001 par value

     

     

    128

     

     

     

    130

     

    Treasury stock

     

     

    (77,996

    )

     

     

    (72,586

    )

    Additional paid-in capital

     

     

    577,840

     

     

     

    607,345

     

    Accumulated deficit

     

     

    (1,550

    )

     

     

    (12,788

    )

    Accumulated other comprehensive loss

     

     

    (4,418

    )

     

     

    (3,444

    )

    Total stockholders' equity

     

     

    494,004

     

     

     

    518,657

     

    Total liabilities and stockholders' equity

     

    $

    925,615

     

     

    $

    1,002,241

     

    Consolidated Statements of Cash Flows

    (unaudited, dollars in thousands)

     

     

    Six Months Ended

     

     

    March 30,

    2024

     

    April 1,

    2023

    Cash flows from operating activities

     

     

     

     

    Net income

     

    $

    11,238

     

     

    $

    44,537

     

    Adjustments to reconcile net income to net cash provided by operating activities:

     

     

     

     

    Depreciation and amortization

     

     

    23,121

     

     

     

    22,845

     

    Restructuring and abandonment charges

     

     

    266

     

     

     

    4,846

     

    Stock-based compensation expense

     

     

    43,031

     

     

     

    41,220

     

    Provision for inventory obsolescence

     

     

    5,293

     

     

     

    10,059

     

    Other

     

     

    2,188

     

     

     

    3,173

     

    Deferred income taxes

     

     

    (31

    )

     

     

    1,358

     

    Foreign currency transaction gains

     

     

    (3,441

    )

     

     

    (14,126

    )

    Changes in operating assets and liabilities:

     

     

     

     

    Accounts receivable

     

     

    (2,793

    )

     

     

    16,932

     

    Inventories

     

     

    161,683

     

     

     

    118,032

     

    Other assets

     

     

    (15,169

    )

     

     

    5,481

     

    Accounts payable and accrued expenses

     

     

    (89,151

    )

     

     

    (186,194

    )

    Accrued compensation

     

     

    16,040

     

     

     

    6,108

     

    Deferred revenue

     

     

    1,857

     

     

     

    (4,484

    )

    Other liabilities

     

     

    10,025

     

     

     

    (463

    )

    Net cash provided by operating activities

     

     

    164,157

     

     

     

    69,324

     

    Cash flows from investing activities

     

     

     

     

    Purchases of marketable securities

     

     

    (45,280

    )

     

     

    —

     

    Purchases of property and equipment

     

     

    (16,263

    )

     

     

    (23,403

    )

    Net cash used in investing activities

     

     

    (61,543

    )

     

     

    (23,403

    )

    Cash flows from financing activities

     

     

     

     

    Payments for repurchase of common stock

     

     

    (76,250

    )

     

     

    (30,054

    )

    Proceeds from exercise of stock options

     

     

    11,905

     

     

     

    17,584

     

    Payments for repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock units

     

     

    (13,242

    )

     

     

    (18,199

    )

    Net cash used in financing activities

     

     

    (77,587

    )

     

     

    (30,669

    )

    Effect of exchange rate changes on cash and cash equivalents

     

     

    704

     

     

     

    4,766

     

    Net increase in cash and cash equivalents

     

     

    25,731

     

     

     

    20,018

     

    Cash and cash equivalents

     

     

     

     

    Beginning of period

     

     

    220,231

     

     

     

    274,855

     

    End of period

     

    $

    245,962

     

     

    $

    294,873

     

    Supplemental disclosure

     

     

     

     

    Cash paid for interest

     

    $

    134

     

     

    $

    330

     

    Cash paid for taxes, net of refunds

     

    $

    12,247

     

     

    $

    6,399

     

    Cash paid for amounts included in the measurement of lease liabilities

     

    $

    6,670

     

     

    $

    7,219

     

    Supplemental disclosure of non-cash investing and financing activities

     

     

     

     

    Purchases of property and equipment in accounts payable and accrued expenses

     

    $

    7,582

     

     

    $

    8,393

     

    Right-of-use assets obtained in exchange for new operating lease liabilities

     

    $

    7,637

     

     

    $

    711

     

    Reconciliation of GAAP to Non-GAAP Cost of Revenue and Gross Profit

     

     

     

     

    (unaudited, in thousands, except percentages)

     

     

     

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    March 30,

    2024

     

    April 1,

    2023

     

    March 30,

    2024

     

    April 1,

    2023

    Reconciliation of GAAP cost of revenue

     

     

     

     

     

     

     

     

    GAAP cost of revenue

     

    $

    140,624

     

     

    $

    172,555

     

     

    $

    470,815

     

     

    $

    560,078

     

    Stock-based compensation expense

     

     

    686

     

     

     

    581

     

     

     

    1,340

     

     

     

    1,151

     

    Amortization of intangibles

     

     

    973

     

     

     

    973

     

     

     

    1,945

     

     

     

    2,158

     

    Non-GAAP cost of revenue

     

    $

    138,965

     

     

    $

    171,001

     

     

    $

    467,530

     

     

    $

    556,769

     

     

     

     

     

     

     

     

     

     

    Reconciliation of GAAP gross profit

     

     

     

     

     

     

     

     

    GAAP gross profit

     

    $

    112,038

     

     

    $

    131,618

     

     

    $

    394,716

     

     

    $

    416,674

     

    Stock-based compensation expense

     

     

    686

     

     

     

    581

     

     

     

    1,340

     

     

     

    1,151

     

    Amortization of intangibles

     

     

    973

     

     

     

    973

     

     

     

    1,945

     

     

     

    2,158

     

    Non-GAAP gross profit

     

    $

    113,697

     

     

    $

    133,172

     

     

    $

    398,001

     

     

    $

    419,983

     

     

     

     

     

     

     

     

     

     

    GAAP gross margin

     

     

    44.3

    %

     

     

    43.3

    %

     

     

    45.6

    %

     

     

    42.7

    %

    Non-GAAP gross margin

     

     

    45.0

    %

     

     

    43.8

    %

     

     

    46.0

    %

     

     

    43.0

    %

    Reconciliation of Selected Non-GAAP Financial Measures

     

     

     

     

    (unaudited, dollars in thousands)

     

     

     

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    March 30,

    2024

     

    April 1,

    2023

     

    March 30,

    2024

     

    April 1,

    2023

    Research and Development (GAAP)

     

    $

    80,322

     

     

    $

    80,785

     

     

    $

    159,557

     

     

    $

    157,726

     

    Stock-based compensation

     

     

    10,419

     

     

     

    9,565

     

     

     

    19,398

     

     

    18,716

    Amortization of intangibles

     

     

    496

     

     

     

    495

     

     

     

    992

     

     

     

    990

     

    Restructuring and abandonment costs

     

     

    -

     

     

     

    2,682

     

     

     

    323

     

     

     

    2,682

     

    Research and Development (Non-GAAP)

     

    $

    69,407

     

     

    $

    68,043

     

     

    $

    138,844

     

     

    $

    135,338

     

     

     

     

     

     

     

     

     

     

    Sales and Marketing (GAAP)

     

    $

    61,835

     

     

    $

    63,621

     

     

    $

    145,785

     

     

    $

    142,317

     

    Stock-based compensation

     

     

    4,972

     

     

     

    4,475

     

     

     

    8,787

     

     

     

    8,588

     

    Amortization of intangibles

     

     

    -

     

     

     

    -

     

     

     

    -

     

     

     

    -

     

    Restructuring and abandonment costs

     

     

    -

     

     

     

    1,034

     

     

     

    113

     

     

     

    1,034

     

    Sales and Marketing (Non-GAAP)

     

    $

    56,863

     

     

    $

    58,112

     

     

    $

    136,885

     

     

    $

    132,695

     

     

     

     

     

     

     

     

     

     

    General and Administrative (GAAP)

     

     

    40,841

     

     

     

    44,438

     

     

     

    80,639

     

     

     

    87,553

     

    Stock-based compensation

     

     

    7,596

     

     

     

    6,404

     

     

     

    13,506

     

     

     

    12,765

     

    Legal and transaction related costs

     

     

    2,395

     

     

     

    9,018

     

     

     

    6,140

     

     

     

    15,307

     

    Amortization of intangibles

     

     

    24

     

     

     

    24

     

     

     

    48

     

     

     

    48

     

    Restructuring and abandonment costs

     

     

    6

     

     

     

    1,130

     

     

     

    138

     

     

     

    1,130

     

    Adjusted General and Administrative (Non-GAAP)

     

    $

    30,820

     

     

    $

    27,862

     

     

    $

    60,807

     

     

    $

    58,303

     

     

     

     

     

     

     

     

     

     

    Total Operating Expenses (GAAP)

     

    $

    182,998

     

     

    $

    188,844

     

     

    $

    385,981

     

     

    $

    387,596

     

    Stock-based compensation

     

     

    22,987

     

     

     

    20,444

     

     

     

    41,691

     

     

     

    40,069

     

    Legal and transaction related costs

     

     

    2,395

     

     

     

    9,018

     

     

     

    6,140

     

     

     

    15,307

     

    Amortization of intangibles

     

     

    520

     

     

     

    519

     

     

     

    1,040

     

     

     

    1,038

     

    Restructuring and abandonment costs

     

     

    6

     

     

     

    4,846

     

     

     

    574

     

     

     

    4,846

     

    Adjusted Operating Expenses (Non-GAAP)

     

    $

    157,090

     

     

    $

    154,017

     

     

    $

    336,536

     

     

    $

    326,336

     

     

     

     

     

     

     

     

     

     

    Total Operating (Loss) Income (GAAP)

     

    $

    (70,960

    )

     

    $

    (57,226

    )

     

    $

    8,735

     

     

    $

    29,078

     

    Stock-based compensation

     

     

    23,673

     

     

     

    21,025

     

     

     

    43,031

     

     

     

    41,220

     

    Legal and transaction related costs

     

     

    2,395

     

     

     

    9,018

     

     

     

    6,140

     

     

     

    15,307

     

    Amortization of intangibles

     

     

    1,493

     

     

     

    1,492

     

     

     

    2,985

     

     

     

    3,196

     

    Restructuring and abandonment costs

     

     

    6

     

     

     

    4,846

     

     

     

    574

     

     

     

    4,846

     

    Adjusted Operating (Loss) Income (Non-GAAP)

     

    $

    (43,393

    )

     

    $

    (20,845

    )

     

    $

    61,465

     

     

    $

    93,647

     

    Depreciation

     

     

    9,750

     

     

     

    10,221

     

     

     

    20,136

     

     

     

    19,649

     

    Adjusted EBITDA (Non-GAAP)

     

    $

    (33,643

    )

     

    $

    (10,624

    )

     

    $

    81,601

     

     

    $

    113,296

     

    Reconciliation of Net (Loss) Income to Adjusted EBITDA

     

     

     

     

    (unaudited, dollars in thousands except percentages)

     

     

     

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    March 30,

    2024

     

    April 1,

    2023

     

    March 30,

    2024

     

    April 1,

    2023

    (In thousands, except percentages)

     

     

     

     

     

     

     

     

    Net (loss) income

     

    $

    (69,709

    )

     

    $

    (30,652

    )

     

    $

    11,238

     

     

    $

    44,537

     

    Add (deduct):

     

     

     

     

     

     

     

     

    Depreciation and amortization

     

     

    11,243

     

     

     

    11,713

     

     

     

    23,121

     

     

     

    22,845

     

    Stock-based compensation expense

     

     

    23,673

     

     

     

    21,025

     

     

     

    43,031

     

     

     

    41,220

     

    Interest income

     

     

    (3,933

    )

     

     

    (3,181

    )

     

     

    (7,008

    )

     

     

    (5,149

    )

    Interest expense

     

     

    122

     

     

     

    152

     

     

     

    227

     

     

     

    311

     

    Other expense (income), net

     

     

    3,303

     

     

     

    2,832

     

     

     

    (6,971

    )

     

     

    (20,745

    )

    (Benefit from) provision for income taxes

     

     

    (743

    )

     

     

    (26,377

    )

     

     

    11,249

     

     

     

    10,124

     

    Legal and transaction related costs (1)

     

     

    2,395

     

     

     

    9,018

     

     

     

    6,140

     

     

     

    15,307

     

    Restructuring and abandonment costs (2)

     

     

    6

     

     

     

    4,846

     

     

     

    574

     

     

     

    4,846

     

    Adjusted EBITDA

     

    $

    (33,643

    )

     

    $

    (10,624

    )

     

    $

    81,601

     

     

    $

    113,296

     

    Revenue

     

    $

    252,662

     

     

    $

    304,173

     

     

    $

    865,531

     

     

    $

    976,752

     

    Net (loss) income margin

     

     

    (27.6

    )%

     

     

    (10.1

    )%

     

     

    1.3

    %

     

     

    4.6

    %

    Adjusted EBITDA margin

     

     

    (13.3

    )%

     

     

    (3.5

    )%

     

     

    9.4

    %

     

     

    11.6

    %

    (1) Legal and transaction-related costs consist of expenses related to our intellectual property ("IP") litigation against Alphabet and Google, as well as legal and transaction costs associated with our acquisition activity, which we do not consider representative of our underlying operating performance.

    (2) Restructuring and abandonment costs for the three and six months ended March 30, 2024 are related to our restructuring plan initiated on June 14, 2023 (the "2023 restructuring plan"). Restructuring and abandonment costs for the three and six months ended April 1, 2023 consist of costs incurred in March 2023 related to abandonment of portions of our office spaces for the remainder of their respective lease terms in support of operational efficiencies. Lease abandonment costs include the impact of the write-off of the associated operating lease right-of-use assets, as well as accelerated depreciation of the related leasehold improvements.

    Reconciliation of GAAP Net (Loss) Income to Non-GAAP Net (Loss) Income

     

     

     

     

    (unaudited, in thousands, except share and per share amounts)

     

     

     

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    March 30,

    2024

     

    April 1,

    2023

     

    March 30,

    2024

     

    April 1,

    2023

    Reconciliation of GAAP net (loss) income

     

     

     

     

     

     

     

     

    GAAP net (loss) income

     

    $

    (69,709

    )

     

    $

    (30,652

    )

     

    $

    11,238

     

    $

    44,537

    Stock-based compensation expense

     

     

    23,673

     

     

     

    21,025

     

     

     

    43,031

     

     

     

    41,220

     

    Legal and transaction related costs

     

     

    2,395

     

     

     

    9,018

     

     

     

    6,140

     

     

     

    15,307

     

    Amortization of intangibles

     

     

    1,493

     

     

     

    1,492

     

     

     

    2,985

     

     

     

    3,196

     

    Restructuring and abandonment costs

     

     

    6

     

     

     

    4,846

     

     

     

    574

     

     

     

    4,846

     

    Non-GAAP net (loss) income

     

    $

    (42,142

    )

     

    $

    5,729

     

     

    $

    63,968

     

     

    $

    109,106

     

     

     

     

     

     

     

     

     

     

    Reconciliation of net (loss) income per share

     

     

     

     

     

     

     

     

    GAAP net (loss) income per share, diluted

     

    $

    (0.56

    )

     

    $

    (0.24

    )

     

    $

    0.09

     

     

    $

    0.34

     

    Non-GAAP adjustments to net (loss) income per share

     

     

    0.22

     

     

     

    0.28

     

     

     

    0.41

     

     

     

    0.49

     

    Non-GAAP net (loss) income per share, diluted

     

    $

    (0.34

    )

     

    $

    0.04

     

     

    $

    0.50

     

     

    $

    0.82

     

    Weighted-average shares used in GAAP per share calculation, diluted

     

     

    123,749,605

     

     

     

    127,952,875

     

     

     

    128,206,823

     

     

     

    132,834,096

     

    Weighted-average shares used in non-GAAP per share calculation, diluted

     

     

    123,749,605

     

     

     

    134,165,207

     

     

     

    128,206,823

     

     

     

    132,834,096

     

    Note: Certain figures may not sum due to rounding

     

     

     

     

     

     

     

     

    Reconciliation of Cash Flows (Used in) Provided by Operating Activities to Free Cash Flow

     

     

     

     

    (unaudited, dollars in thousands)

     

     

     

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    March 30,

    2024

     

    April 1,

    2023

     

    March 30,

    2024

     

    April 1,

    2023

    Cash flows (used in) provided by operating activities

     

    $

    (111,244

    )

     

    $

    (112,962

    )

     

    $

    164,157

     

     

    $

    69,324

     

    Less: Purchases of property and equipment

     

     

    (10,186

    )

     

     

    (8,714

    )

     

     

    (16,263

    )

     

     

    (23,403

    )

    Free cash flow

     

    $

    (121,430

    )

     

    $

    (121,676

    )

     

    $

    147,894

     

     

    $

    45,921

     

    Revenue by Product Category

     

     

     

     

    (unaudited, dollars in thousands)

     

     

     

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    March 30,

    2024

     

    April 1,

    2023

     

    March 30,

    2024

     

    April 1,

    2023

    (In thousands)

     

     

     

     

     

     

     

     

    Sonos speakers

     

    $

    187,262

     

    $

    241,180

     

    $

    690,273

     

    $

    780,377

    Sonos system products

     

     

    49,265

     

     

     

    44,091

     

     

     

    133,826

     

     

     

    158,525

     

    Partner products and other revenue

     

     

    16,135

     

     

     

    18,902

     

     

     

    41,432

     

     

     

    37,850

     

    Total revenue

     

    $

    252,662

     

     

    $

    304,173

     

     

    $

    865,531

     

     

    $

    976,752

     

    Revenue by Geographical Region

     

     

     

     

    (unaudited, dollars in thousands)

     

     

     

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    March 30,

    2024

     

    April 1,

    2023

     

    March 30,

    2024

     

    April 1,

    2023

    Americas

     

    $

    170,187

     

    $

    196,533

     

    $

    562,627

     

    $

    593,097

    Europe, Middle East and Africa

     

     

    69,356

     

     

     

    89,054

     

     

     

    261,173

     

     

     

    329,494

     

    Asia Pacific

     

     

    13,119

     

     

     

    18,586

     

     

     

    41,731

     

     

     

    54,161

     

    Total revenue

     

    $

    252,662

     

     

    $

    304,173

     

     

    $

    865,531

     

     

    $

    976,752

     

    Stock-based Compensation

     

     

     

     

    (unaudited, dollars in thousands)

     

     

     

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    March 30,

    2024

     

    April 1,

    2023

     

    March 30,

    2024

     

    April 1,

    2023

    (In thousands)

     

     

     

     

     

     

     

     

    Cost of revenue

     

    $

    686

     

    $

    581

     

    $

    1,340

     

    $

    1,151

    Research and development

     

     

    10,419

     

     

     

    9,565

     

     

     

    19,398

     

     

     

    18,716

     

    Sales and marketing

     

     

    4,972

     

     

     

    4,475

     

     

     

    8,787

     

     

     

    8,588

     

    General and administrative

     

     

    7,596

     

     

     

    6,404

     

     

     

    13,506

     

     

     

    12,765

     

    Total stock-based compensation expense

     

    $

    23,673

     

     

    $

    21,025

     

     

    $

    43,031

     

     

    $

    41,220

     

    Amortization of Intangibles

     

     

     

     

    (unaudited, dollars in thousands)

     

     

     

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    March 30,

    2024

     

    April 1,

    2023

     

    March 30,

    2024

     

    April 1,

    2023

    Cost of revenue

     

    $

    973

     

    $

    973

     

    $

    1,945

     

    $

    2,158

    Research and development

     

     

    496

     

     

     

    495

     

     

     

    992

     

     

     

    990

     

    Sales and marketing

     

     

    -

     

     

     

    -

     

     

     

    -

     

     

     

    -

     

    General and administrative

     

     

    24

     

     

     

    24

     

     

     

    48

     

     

     

    48

     

    Total amortization of intangibles

     

    $

    1,493

     

     

    $

    1,492

     

     

    $

    2,985

     

     

    $

    3,196

     

    Use of Non-GAAP Measures

    We have provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles ("U.S. GAAP"), including adjusted EBITDA, adjusted EBITDA margin, free cash flow, non-GAAP gross margin, net income (loss) excluding stock-based compensation, legal and transaction related fees, amortization of intangibles, and restructuring and abandonment costs and diluted earnings (loss) per share excluding stock-based compensation, legal and transaction related fees, amortization of intangibles and restructuring and abandonment costs. These non-GAAP financial measures are not based on any standardized methodology prescribed by U.S. GAAP and are not necessarily comparable to similarly titled measures presented by other companies. We use these non-GAAP financial measures to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses and other items that we exclude in these non-GAAP financial measures. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects and allowing for greater transparency with respect to a key financial metric used by our management in its financial and operational decision-making. Non-GAAP financial measures should not be considered in isolation of, or as an alternative to, measures prepared in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of these financial measures to their nearest U.S. GAAP financial equivalents provided in the financial statement tables above. We define Adjusted EBITDA as net income (loss) adjusted to exclude the impact of depreciation and amortization, stock-based compensation expense, interest income, interest expense, other income, income taxes, restructuring and abandonment costs, legal and transaction related fees and other items that we do not consider representative of our underlying operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. We define free cash flow as net cash from operations less purchases of property and equipment. We define non-GAAP gross margin as GAAP gross margin, excluding stock-based compensation and amortization of intangible assets. We calculate non-GAAP net income (loss) excluding stock-based compensation, legal and transaction related fees, amortization of intangibles and restructuring and abandonment costs as net income (loss) less stock-based compensation, legal and transaction related fees, amortization of intangibles and restructuring and abandonment costs. We calculate non-GAAP diluted earnings (loss) per share excluding stock-based compensation, legal and transaction related fees, amortization of intangibles and restructuring and abandonment costs as net income (loss) less stock-based compensation, legal and transaction related fees, amortization of intangibles and restructuring and abandonment costs divided by our number of shares at fiscal year end. We do not provide a reconciliation of forward-looking non-GAAP financial measures to their comparable GAAP financial measures because we cannot do so without unreasonable effort due to unavailability of information needed to calculate reconciling items and due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP financial measures in future periods. When planning, forecasting and analyzing future periods, we do so primarily on a non-GAAP basis without preparing a GAAP analysis as that would require estimates for items such as stock-based compensation, which is inherently difficult to predict with reasonable accuracy. Stock-based compensation expense is difficult to estimate because it depends on our future hiring and retention needs, as well as the future fair market value of our common stock, all of which are difficult to predict and subject to constant change. In addition, for purposes of setting annual guidance, it would be difficult to quantify stock-based compensation expense for the year with reasonable accuracy in the current quarter. As a result, we do not believe that a GAAP reconciliation would provide meaningful supplemental information about our outlook.

    Forward Looking Statements

    This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding our outlook for the fiscal year ending September 28, 2024, our long-term outlook, financial, growth and business strategies and opportunities, growth targets, our product cycle and roadmap, including our anticipated new product launch and the timing thereof, our investments in R&D, profitability and gross margins, the macroeconomic environment, and other factors affecting variability in our financial results. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors, including, but not limited to: our ability to accurately forecast product demand and effectively forecast and manage owned and channel inventory levels; the impact of global economic, market and political events, including continued inflationary pressures, rising interest rates and, in certain markets, foreign currency exchange rate fluctuations; changes in consumer income and overall consumer spending as a result of economic or political uncertainty or conditions; changes in consumer spending patterns; our ability to successfully introduce new products and services and maintain or expand the success of our existing products; the success of our efforts to expand our direct-to-consumer channel; the success of our financial, growth and business strategies; our ability to compete in the market and maintain or expand market share; our ability to meet product demand and manage any product availability delays; supply chain challenges, including shipping and logistics challenges and component supply-related challenges; our ability to protect our brand and intellectual property; and the other risk factors set forth under the caption "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended December 30, 2023 and our other filings filed with the Securities and Exchange Commission (the "SEC"), copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this press release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events. Sonos and Sonos product names are trademarks or registered trademarks of Sonos, Inc. All other product names and services may be trademarks or service marks of their respective owners.

    About Sonos

    Sonos (NASDAQ:SONO) is one of the world's leading sound experience brands. As the inventor of multi-room wireless home audio, Sonos' innovation helps the world listen better by giving people access to the content they love and allowing them to control it however they choose. Known for delivering an unparalleled sound experience, thoughtful home design aesthetic, simplicity of use and an open platform, Sonos makes the breadth of audio content available to anyone. Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.

    View source version on businesswire.com: https://www.businesswire.com/news/home/20240507745282/en/

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      Sonos, Inc. (NASDAQ:SONO) today announced that after market close on Wednesday, May 7, 2025 the company will report financial results for the second quarter ended March 29, 2025. The company will issue a press release and accompanying slide presentation at that time which will be accessible at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports. The company will host a conference call and Q&A to discuss the results on the same day at 4:30 p.m. Eastern Time. A live webcast of the conference call and Q&A will be accessible at https://investors.sonos.com/news-and-events/default.aspx. A replay of the webcast and transcript will be available through the same lin

      4/16/25 4:05:00 PM ET
      $SONO
      Consumer Electronics/Appliances
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    • Sonos Appoints Hugo Barra to Board of Directors; Mike Volpi Steps Down

      Sonos, Inc. (NASDAQ:SONO) today announced that it has appointed Hugo Barra to its Board of Directors effective April 7, 2025. Mr. Barra is the co-founder and head of product at /dev/agents, a software company building a next-generation operating system for AI agents. "Hugo is a world-class technologist with senior executive experience at several of the most important and successful consumer tech companies," said Julius Genachowski, Chair of the Sonos Board. "He has a proven ability to turn cutting-edge innovation into great products - a great fit for Sonos. With his deep expertise, including in AI, we're excited to have him on the Board, engaging with the leadership team and adding value."

      4/10/25 8:30:00 AM ET
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    • Sonos Reports Second Quarter Fiscal 2025 Results

      Q2 revenue at high end of guidance range, Adjusted EBITDA above high end due to significant year over year expense declines Sonos, Inc. (NASDAQ:SONO) today reported Second Quarter Fiscal 2025 results. "We made significant progress in Q2 across our top initiatives," said Tom Conrad, Sonos Interim Chief Executive Officer. "We're firmly on track in restoring the reliability and responsiveness our customers expect, with nine major software updates delivered in the last 120 days and more on the way. We're actively navigating the evolving tariff landscape with operational discipline and flexibility and we're reinvigorating demand through strategic pricing on Era 100, one of our most popular gat

      5/7/25 4:02:00 PM ET
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      Consumer Electronics/Appliances
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    • Sonos Announces Date for Second Quarter Fiscal 2025 Financial Results and Conference Call

      Sonos, Inc. (NASDAQ:SONO) today announced that after market close on Wednesday, May 7, 2025 the company will report financial results for the second quarter ended March 29, 2025. The company will issue a press release and accompanying slide presentation at that time which will be accessible at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports. The company will host a conference call and Q&A to discuss the results on the same day at 4:30 p.m. Eastern Time. A live webcast of the conference call and Q&A will be accessible at https://investors.sonos.com/news-and-events/default.aspx. A replay of the webcast and transcript will be available through the same lin

      4/16/25 4:05:00 PM ET
      $SONO
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    • Sonos Reports First Quarter Fiscal 2025 Results

      Q1 revenue near high-end of guidance range, announced reduction in force Sonos, Inc. (NASDAQ:SONO) today reported First Quarter Fiscal 2025 results. "Yesterday we implemented important organizational changes that mark the start of a new chapter of efficiency and growth for Sonos," said Tom Conrad, Sonos Interim CEO. "I see tremendous opportunity in front of us. The team and I are hard at work improving the core experience for our customers while designing the next set of Sonos products and innovations. It's an honor to show up every day to do this work with the talented Sonos team." "Our Q1 results show our team's commitment to execution as we navigate a difficult environment," commen

      2/6/25 8:30:00 AM ET
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    • Interim CEO Conrad Thomas converted options into 29,971 shares and covered exercise/tax liability with 10,364 shares, increasing direct ownership by 23% to 105,035 units (SEC Form 4)

      4 - Sonos Inc (0001314727) (Issuer)

      4/15/25 5:04:08 PM ET
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    • Director Barra Hugo was granted 16,626 shares (SEC Form 4)

      4 - Sonos Inc (0001314727) (Issuer)

      4/10/25 8:43:27 AM ET
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    • SEC Form 3 filed by new insider Barra Hugo

      3 - Sonos Inc (0001314727) (Issuer)

      4/10/25 8:39:04 AM ET
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    • Amendment: SEC Form SC 13G/A filed by Sonos Inc.

      SC 13G/A - Sonos Inc (0001314727) (Subject)

      11/14/24 6:05:25 AM ET
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    • SEC Form SC 13G filed by Sonos Inc.

      SC 13G - Sonos Inc (0001314727) (Subject)

      9/20/24 5:04:57 PM ET
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    • SEC Form SC 13G/A filed by Sonos Inc. (Amendment)

      SC 13G/A - Sonos Inc (0001314727) (Subject)

      2/14/24 4:19:51 PM ET
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    • Large owner Coliseum Capital Management, Llc bought $1,873,230 worth of shares (209,663 units at $8.93) (SEC Form 4)

      4 - Sonos Inc (0001314727) (Issuer)

      4/7/25 8:08:42 PM ET
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    • Sonos downgraded by Morgan Stanley with a new price target

      Morgan Stanley downgraded Sonos from Overweight to Underweight and set a new price target of $11.00 from $25.00 previously

      9/26/24 7:42:38 AM ET
      $SONO
      Consumer Electronics/Appliances
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    • Sonos downgraded by Craig Hallum with a new price target

      Craig Hallum downgraded Sonos from Buy to Hold and set a new price target of $10.00 from $25.00 previously

      8/8/24 7:10:59 AM ET
      $SONO
      Consumer Electronics/Appliances
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    • Sonos upgraded by Morgan Stanley with a new price target

      Morgan Stanley upgraded Sonos from Equal-Weight to Overweight and set a new price target of $20.00 from $17.00 previously

      12/12/23 8:11:53 AM ET
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    • Sonos Appoints Hugo Barra to Board of Directors; Mike Volpi Steps Down

      Sonos, Inc. (NASDAQ:SONO) today announced that it has appointed Hugo Barra to its Board of Directors effective April 7, 2025. Mr. Barra is the co-founder and head of product at /dev/agents, a software company building a next-generation operating system for AI agents. "Hugo is a world-class technologist with senior executive experience at several of the most important and successful consumer tech companies," said Julius Genachowski, Chair of the Sonos Board. "He has a proven ability to turn cutting-edge innovation into great products - a great fit for Sonos. With his deep expertise, including in AI, we're excited to have him on the Board, engaging with the leadership team and adding value."

      4/10/25 8:30:00 AM ET
      $SONO
      Consumer Electronics/Appliances
      Consumer Staples
    • Sonos Announces CEO Transition

      Patrick Spence to Step Down as CEO and Board Member Tom Conrad Appointed Interim CEO Sonos, Inc. (NASDAQ:SONO) today announced that the Sonos Board of Directors and Patrick Spence have agreed that Mr. Spence will step down as Chief Executive Officer (CEO) and as a member of the Board effective today. The Board has appointed Tom Conrad, an independent member of the Board since 2017, as Interim CEO, also effective as of today. The Board has initiated a search for its next CEO with the assistance of a leading executive search firm, and is committed to identifying a leader who will build on the Sonos legacy of innovation and excellence in serving its customers while also driving profitable

      1/13/25 8:00:00 AM ET
      $SONO
      Consumer Electronics/Appliances
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    • Sonos Appoints Bracken Darrell to Board of Directors

      Bracken's appointment bolster Sonos' Board of world-class leaders Sonos, Inc. (NASDAQ:SONO) today announced the appointment of Bracken Darrell, President and CEO of VF Corporation, to its Board, effective Feb. 12, 2024. "With Bracken's excellent track record leading world-class product companies and his deep experience in our space, we are delighted to welcome him to the Board. We're excited about the value he can add as Sonos continues its journey to become the world's leading sound experience company," said Julius Genachowski, Chair of the Sonos Board. Bracken has a long history and proven experience in business leadership, product innovation, and brand management roles. Prior to jo

      2/13/24 4:05:00 PM ET
      $SONO
      Consumer Electronics/Appliances
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