SANTA BARBARA, Calif.–(BUSINESS WIRE)–Sonos, Inc. (Nasdaq: SONO) today reported fourth quarter and fiscal 2024 results.
“Thanks to our team going all-in on our app recovery efforts, we made significant progress in bringing the quality of our software to a level that we’re all proud of, which enabled us to launch our highly anticipated new products, Arc Ultra and Sub 4, in time for the holidays,” Sonos CEO Patrick Spence commented. “Initial feedback on our new products has been very positive, which, along with the introduction of Ace earlier this year, makes our product lineup the strongest it’s ever been. Sonos is still the best home audio system, and we’re focused on using this industry-leading product lineup to acquire more customers and solidify our loyal customer base. The Sonos flywheel remains strong, as evidenced by the fact that the number of new products per home increased in Fiscal 2024. While the overall audio category continues to face headwinds, we are confident that we are well positioned to take more of it over time.”
Fiscal 2024 Financial Highlights (unaudited)
- Revenue of $1,518.1 million
- GAAP gross margin of 45.4%
- GAAP net loss of $38.1 million, GAAP diluted earnings per share (EPS) of -$0.31
- Non-GAAP net income1 of $71.4 million, Non-GAAP diluted EPS1 of $0.56
- Adjusted EBITDA1 of $107.9 million
Fourth Quarter Fiscal 2024 Financial Highlights (unaudited)
- Revenue of $255.4 million
- GAAP gross margin of 40.3%
- GAAP net loss of $53.1 million, GAAP diluted earnings per share (EPS) of -$0.44
- Non-GAAP net loss1 of $22.1 million, Non-GAAP diluted EPS1 of -$0.18
- Adjusted EBITDA1 of -$22.6 million
Notes:
(1) Non-GAAP net income (loss)/Non-GAAP diluted earnings 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.
Guidance
The company will provide guidance on its fourth quarter and Fiscal 2024 earnings call.
Supplemental Earnings Presentation
The company has posted a supplemental earnings presentation accompanying its fourth quarter and 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. Additional detailed financial and business information regarding certain non-financial key metrics, new products, brand initiatives and our sustainability and social impact efforts is included in the supplemental earnings presentation.
Conference Call, Webcast and Transcript
The company will host a webcast of its conference call and Q&A related to its fourth quarter and fiscal 2024 results on November 13, 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.
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Consolidated Statements of Operations and Comprehensive Loss |
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(unaudited, in thousands, except share and per share amounts) |
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||||||||
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Three Months Ended |
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Twelve Months Ended |
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|
|
September 28, |
|
September 30, |
|
September 28, |
|
September 30, |
||||||||
|
Revenue |
|
$ |
255,380 |
|
|
$ |
305,147 |
|
|
$ |
1,518,056 |
|
|
$ |
1,655,255 |
|
|
Cost of revenue |
|
|
152,364 |
|
|
|
177,093 |
|
|
|
828,683 |
|
|
|
938,765 |
|
|
Gross profit |
|
|
103,016 |
|
|
|
128,054 |
|
|
|
689,373 |
|
|
|
716,490 |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
||||||||
|
Research and development |
|
|
70,777 |
|
|
|
65,517 |
|
|
|
304,558 |
|
|
|
301,001 |
|
|
Sales and marketing |
|
|
73,180 |
|
|
|
58,601 |
|
|
|
290,609 |
|
|
|
267,518 |
|
|
General and administrative |
|
|
28,428 |
|
|
|
32,297 |
|
|
|
142,252 |
|
|
|
168,518 |
|
|
Total operating expenses |
|
|
172,385 |
|
|
|
156,415 |
|
|
|
737,419 |
|
|
|
737,037 |
|
|
Operating loss |
|
|
(69,369 |
) |
|
|
(28,361 |
) |
|
|
(48,046 |
) |
|
|
(20,547 |
) |
|
Other income (expense), net |
|
|
|
|
|
|
|
|
||||||||
|
Interest income |
|
|
2,327 |
|
|
|
2,661 |
|
|
|
11,965 |
|
|
|
10,201 |
|
|
Interest expense |
|
|
(108 |
) |
|
|
(149 |
) |
|
|
(441 |
) |
|
|
(733 |
) |
|
Other income (expense), net |
|
|
4,864 |
|
|
|
(6,696 |
) |
|
|
9,371 |
|
|
|
15,473 |
|
|
Total other income (expense), net |
|
|
7,083 |
|
|
|
(4,184 |
) |
|
|
20,895 |
|
|
|
24,941 |
|
|
(Loss) income before (benefit from) provision for income taxes |
|
|
(62,286 |
) |
|
|
(32,545 |
) |
|
|
(27,151 |
) |
|
|
4,394 |
|
|
(Benefit from) provision for income taxes |
|
|
(9,193 |
) |
|
|
(1,306 |
) |
|
|
10,995 |
|
|
|
14,668 |
|
|
Net loss |
|
$ |
(53,093 |
) |
|
$ |
(31,239 |
) |
|
$ |
(38,146 |
) |
|
$ |
(10,274 |
) |
|
|
|
|
|
|
|
|
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|
Net loss attributable to common stockholders: |
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|
|
|
|
|
|
|
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Basic and diluted |
|
$ |
(53,093 |
) |
|
$ |
(31,239 |
) |
|
$ |
(38,146 |
) |
|
$ |
(10,274 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net loss per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
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|
Basic |
|
$ |
(0.44 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.31 |
) |
|
$ |
(0.08 |
) |
|
Diluted |
|
$ |
(0.44 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.31 |
) |
|
$ |
(0.08 |
) |
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Weighted-average shares used in computing net loss per share attributable to common stockholders: |
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|
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Basic |
|
|
121,389,519 |
|
|
|
127,335,311 |
|
|
|
123,218,532 |
|
|
|
127,702,885 |
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|
Diluted |
|
|
121,389,519 |
|
|
|
127,335,311 |
|
|
|
123,218,532 |
|
|
|
127,702,885 |
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|
|
|
|
|
|
|
|
|
|
||||||||
|
Total comprehensive loss |
|
|
|
|
|
|
|
|
||||||||
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Net loss |
|
|
(53,093 |
) |
|
|
(31,239 |
) |
|
|
(38,146 |
) |
|
|
(10,274 |
) |
|
Change in foreign currency translation adjustment |
|
|
1,872 |
|
|
|
2,035 |
|
|
|
1,604 |
|
|
|
153 |
|
|
Net unrealized gain on marketable securities |
|
|
154 |
|
|
|
— |
|
|
|
122 |
|
|
|
— |
|
|
Comprehensive loss |
|
$ |
(51,067 |
) |
|
$ |
(29,204 |
) |
|
$ |
(36,420 |
) |
|
$ |
(10,121 |
) |
|
Consolidated Balance Sheets |
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|
(unaudited, in thousands, except par values) |
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As of |
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|
|
September 28, |
|
September 30, |
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|
Assets |
|
|
|
|
||||
|
Current assets: |
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
169,732 |
|
|
$ |
220,231 |
|
|
Marketable securities |
|
|
51,426 |
|
|
|
– |
|
|
Accounts receivable, net |
|
|
44,513 |
|
|
|
67,583 |
|
|
Inventories |
|
|
231,505 |
|
|
|
346,521 |
|
|
Prepaids and other current assets |
|
|
53,910 |
|
|
|
25,296 |
|
|
Total current assets |
|
|
551,086 |
|
|
|
659,631 |
|
|
Property and equipment, net |
|
|
102,148 |
|
|
|
87,075 |
|
|
Operating lease right-of-use assets |
|
|
50,175 |
|
|
|
48,918 |
|
|
Goodwill |
|
|
82,854 |
|
|
|
80,420 |
|
|
Intangible assets, net |
|
|
|
|
||||
|
In-process research and development |
|
|
73,770 |
|
|
|
69,791 |
|
|
Other intangible assets |
|
|
14,266 |
|
|
|
20,218 |
|
|
Deferred tax assets |
|
|
10,314 |
|
|
|
1,659 |
|
|
Other noncurrent assets |
|
|
31,699 |
|
|
|
34,529 |
|
|
Total assets |
|
$ |
916,312 |
|
|
$ |
1,002,241 |
|
|
|
|
|
|
|
||||
|
Liabilities and stockholders’ equity |
|
|
|
|
||||
|
Current liabilities: |
|
|
|
|
||||
|
Accounts payable |
|
$ |
194,590 |
|
|
$ |
187,981 |
|
|
Accrued expenses |
|
|
87,783 |
|
|
|
89,717 |
|
|
Accrued compensation |
|
|
15,701 |
|
|
|
22,079 |
|
|
Deferred revenue, current |
|
|
21,802 |
|
|
|
20,188 |
|
|
Other current liabilities |
|
|
46,277 |
|
|
|
34,253 |
|
|
Total current liabilities |
|
|
366,153 |
|
|
|
354,218 |
|
|
Operating lease liabilities, noncurrent |
|
|
56,588 |
|
|
|
54,956 |
|
|
Deferred revenue, noncurrent |
|
|
61,075 |
|
|
|
60,650 |
|
|
Deferred tax liabilities |
|
|
60 |
|
|
|
9,846 |
|
|
Other noncurrent liabilities |
|
|
3,816 |
|
|
|
3,914 |
|
|
Total liabilities |
|
|
487,692 |
|
|
|
483,584 |
|
|
|
|
|
|
|
||||
|
Commitments and contingencies |
|
|
|
|
||||
|
Stockholders’ equity: |
|
|
|
|
||||
|
Common stock, $0.001 par value |
|
|
123 |
|
|
|
130 |
|
|
Treasury stock |
|
|
(17,096 |
) |
|
|
(72,586 |
) |
|
Additional paid-in capital |
|
|
498,245 |
|
|
|
607,345 |
|
|
Accumulated deficit |
|
|
(50,934 |
) |
|
|
(12,788 |
) |
|
Accumulated other comprehensive loss |
|
|
(1,718 |
) |
|
|
(3,444 |
) |
|
Total stockholders’ equity |
|
|
428,620 |
|
|
|
518,657 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
916,312 |
|
|
$ |
1,002,241 |
|
|
Consolidated Statements of Cash Flows |
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|
(unaudited, dollars in thousands) |
||||||||
|
|
|
Twelve Months Ended |
||||||
|
|
|
September 28, |
|
September 30, |
||||
|
Cash flows from operating activities |
|
|
|
|
||||
|
Net loss |
|
$ |
(38,146 |
) |
|
$ |
(10,274 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||
|
Stock-based compensation expense |
|
|
84,294 |
|
|
|
76,857 |
|
|
Depreciation and amortization |
|
|
52,378 |
|
|
|
48,969 |
|
|
Provision for inventory obsolescence |
|
|
8,894 |
|
|
|
20,640 |
|
|
Restructuring and abandonment charges |
|
|
2,204 |
|
|
|
5,533 |
|
|
Deferred income taxes |
|
|
(18,922 |
) |
|
|
(583 |
) |
|
Other |
|
|
3,701 |
|
|
|
5,535 |
|
|
Foreign currency transaction gains |
|
|
(7,276 |
) |
|
|
(7,335 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|
||||
|
Accounts receivable |
|
|
23,044 |
|
|
|
32,120 |
|
|
Inventories |
|
|
106,122 |
|
|
|
87,004 |
|
|
Other assets |
|
|
(28,775 |
) |
|
|
10,470 |
|
|
Accounts payable and accrued expenses |
|
|
(789 |
) |
|
|
(162,345 |
) |
|
Accrued compensation |
|
|
(6,775 |
) |
|
|
(2,185 |
) |
|
Deferred revenue |
|
|
304 |
|
|
|
(4,576 |
) |
|
Other liabilities |
|
|
9,648 |
|
|
|
576 |
|
|
Net cash provided by operating activities |
|
|
189,906 |
|
|
|
100,406 |
|
|
Cash flows from investing activities |
|
|
|
|
||||
|
Purchases of marketable securities |
|
|
(90,495 |
) |
|
|
— |
|
|
Purchases of property and equipment and intangible assets |
|
|
(55,247 |
) |
|
|
(50,286 |
) |
|
Maturities of marketable securities |
|
|
40,500 |
|
|
|
— |
|
|
Net cash used in investing activities |
|
|
(105,242 |
) |
|
|
(50,286 |
) |
|
Cash flows from financing activities |
|
|
|
|
||||
|
Payments for repurchase of common stock |
|
|
(129,018 |
) |
|
|
(100,064 |
) |
|
Payments for repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock units |
|
|
(25,344 |
) |
|
|
(29,874 |
) |
|
Proceeds from exercise of stock options |
|
|
17,053 |
|
|
|
21,346 |
|
|
Net cash used in financing activities |
|
|
(137,309 |
) |
|
|
(108,592 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
2,146 |
|
|
|
3,848 |
|
|
Net decrease in cash and cash equivalents |
|
|
(50,499 |
) |
|
|
(54,624 |
) |
|
Cash and cash equivalents |
|
|
|
|
||||
|
Beginning of period |
|
|
220,231 |
|
|
|
274,855 |
|
|
End of period |
|
$ |
169,732 |
|
|
$ |
220,231 |
|
|
Supplemental disclosure |
|
|
|
|
||||
|
Cash paid for interest |
|
$ |
256 |
|
|
$ |
1,330 |
|
|
Cash paid for taxes, net of refunds |
|
$ |
21,206 |
|
|
$ |
9,522 |
|
|
Cash paid for amounts included in the measurement of lease liabilities |
|
$ |
11,008 |
|
|
$ |
14,218 |
|
|
Supplemental disclosure of non-cash investing and financing activities |
|
|
|
|
||||
|
Purchases of property and equipment in accounts payable and accrued expenses |
|
$ |
7,878 |
|
|
$ |
2,784 |
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities |
|
$ |
11,492 |
|
|
$ |
31,692 |
|
|
Excise tax on share repurchases, accrued but not paid |
|
$ |
602 |
|
|
$ |
— |
|
|
Change in estimate of asset retirement obligations |
|
$ |
— |
|
|
$ |
2,290 |
|
|
Reconciliation of GAAP to Non-GAAP Cost of Revenue and Gross Profit |
||||||||||||||||
|
(unaudited, in thousands, except percentages) |
||||||||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
September 28, |
|
September 30, |
|
September 28, |
|
September 30, |
||||||||
|
Reconciliation of GAAP cost of revenue |
|
|
|
|
|
|
|
|
||||||||
|
GAAP cost of revenue |
|
$ |
152,364 |
|
|
$ |
177,093 |
|
|
$ |
828,683 |
|
|
$ |
938,765 |
|
|
Stock-based compensation expense |
|
|
620 |
|
|
|
437 |
|
|
|
2,614 |
|
|
|
2,038 |
|
|
Amortization of intangibles |
|
|
973 |
|
|
|
973 |
|
|
|
3,891 |
|
|
|
4,103 |
|
|
Non-GAAP cost of revenue |
|
$ |
150,771 |
|
|
$ |
175,683 |
|
|
$ |
822,178 |
|
|
$ |
932,624 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Reconciliation of GAAP gross profit |
|
|
|
|
|
|
|
|
||||||||
|
GAAP gross profit |
|
$ |
103,016 |
|
|
$ |
128,054 |
|
|
$ |
689,373 |
|
|
$ |
716,490 |
|
|
Stock-based compensation expense |
|
|
620 |
|
|
|
437 |
|
|
|
2,614 |
|
|
|
2,038 |
|
|
Amortization of intangibles |
|
|
973 |
|
|
|
973 |
|
|
|
3,891 |
|
|
|
4,103 |
|
|
Non-GAAP gross profit |
|
$ |
104,609 |
|
|
$ |
129,464 |
|
|
$ |
695,878 |
|
|
$ |
722,631 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP gross margin |
|
|
40.3 |
% |
|
|
42.0 |
% |
|
|
45.4 |
% |
|
|
43.3 |
% |
|
Non-GAAP gross margin |
|
|
41.0 |
% |
|
|
42.4 |
% |
|
|
45.8 |
% |
|
|
43.7 |
% |
|
Reconciliation of Selected Non-GAAP Financial Measures |
||||||||||||||||
|
(unaudited, dollars in thousands) |
||||||||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
September 28, |
|
September 30, |
|
September 28, |
|
September 30, |
||||||||
|
Research and Development (GAAP) |
|
$ |
70,777 |
|
|
$ |
65,517 |
|
|
$ |
304,558 |
|
|
$ |
301,001 |
|
|
Stock-based compensation |
|
|
8,780 |
|
|
|
8,177 |
|
|
|
37,913 |
|
|
|
35,530 |
|
|
Amortization of intangibles |
|
|
497 |
|
|
|
496 |
|
|
|
1,985 |
|
|
|
1,983 |
|
|
Restructuring and abandonment costs |
|
|
4,942 |
|
|
|
188 |
|
|
|
5,743 |
|
|
|
6,556 |
|
|
Research and Development (Non-GAAP) |
|
$ |
56,558 |
|
|
$ |
56,656 |
|
|
$ |
258,917 |
|
|
$ |
256,932 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Sales and Marketing (GAAP) |
|
$ |
73,180 |
|
|
$ |
58,601 |
|
|
$ |
290,609 |
|
|
$ |
267,518 |
|
|
Stock-based compensation |
|
|
4,201 |
|
|
|
3,499 |
|
|
|
17,499 |
|
|
|
15,677 |
|
|
Amortization of intangibles |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
Restructuring and abandonment costs |
|
|
2,473 |
|
|
|
180 |
|
|
|
2,770 |
|
|
|
5,635 |
|
|
Sales and Marketing (Non-GAAP) |
|
$ |
66,506 |
|
|
$ |
54,922 |
|
|
$ |
270,340 |
|
|
$ |
246,206 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
General and Administrative (GAAP) |
|
|
28,428 |
|
|
|
32,297 |
|
|
|
142,252 |
|
|
|
168,518 |
|
|
Stock-based compensation |
|
|
5,732 |
|
|
|
5,195 |
|
|
|
26,268 |
|
|
|
23,612 |
|
|
Legal and transaction related costs |
|
|
182 |
|
|
|
2,944 |
|
|
|
7,383 |
|
|
|
32,950 |
|
|
Amortization of intangibles |
|
|
24 |
|
|
|
24 |
|
|
|
96 |
|
|
|
96 |
|
|
Restructuring and abandonment costs |
|
|
2,571 |
|
|
|
106 |
|
|
|
3,340 |
|
|
|
3,458 |
|
|
Adjusted General and Administrative (Non-GAAP) |
|
$ |
19,919 |
|
|
$ |
24,028 |
|
|
$ |
105,165 |
|
|
$ |
108,402 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total Operating Expenses (GAAP) |
|
$ |
172,385 |
|
|
$ |
156,415 |
|
|
$ |
737,419 |
|
|
$ |
737,037 |
|
|
Stock-based compensation |
|
|
18,713 |
|
|
|
16,871 |
|
|
|
81,680 |
|
|
|
74,819 |
|
|
Legal and transaction related costs |
|
|
182 |
|
|
|
2,944 |
|
|
|
7,383 |
|
|
|
32,950 |
|
|
Amortization of intangibles |
|
|
521 |
|
|
|
520 |
|
|
|
2,081 |
|
|
|
2,079 |
|
|
Restructuring and abandonment costs |
|
|
9,986 |
|
|
|
474 |
|
|
|
11,853 |
|
|
|
15,649 |
|
|
Adjusted Operating Expenses (Non-GAAP) |
|
$ |
142,983 |
|
|
$ |
135,606 |
|
|
$ |
634,422 |
|
|
$ |
611,540 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Total Operating Loss (GAAP) |
|
$ |
(69,369 |
) |
|
$ |
(28,361 |
) |
|
$ |
(48,046 |
) |
|
$ |
(20,547 |
) |
|
Stock-based compensation |
|
|
19,333 |
|
|
|
17,308 |
|
|
|
84,294 |
|
|
|
76,857 |
|
|
Legal and transaction related costs |
|
|
182 |
|
|
|
2,944 |
|
|
|
7,383 |
|
|
|
32,950 |
|
|
Amortization of intangibles |
|
|
1,494 |
|
|
|
1,493 |
|
|
|
5,972 |
|
|
|
6,182 |
|
|
Restructuring and abandonment costs |
|
|
9,986 |
|
|
|
474 |
|
|
|
11,853 |
|
|
|
15,649 |
|
|
Adjusted Operating (Loss) Income (Non-GAAP) |
|
$ |
(38,374 |
) |
|
$ |
(6,142 |
) |
|
$ |
61,456 |
|
|
$ |
111,091 |
|
|
Depreciation |
|
|
15,730 |
|
|
|
12,422 |
|
|
|
46,406 |
|
|
|
42,787 |
|
|
Adjusted EBITDA (Non-GAAP) |
|
$ |
(22,644 |
) |
|
$ |
6,280 |
|
|
$ |
107,862 |
|
|
$ |
153,878 |
|
|
Reconciliation of Net Loss to Adjusted EBITDA |
||||||||||||||||
|
(unaudited, dollars in thousands except percentages) |
||||||||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
September 28, |
|
September 30, |
|
September 28, |
|
September 30, |
||||||||
|
(In thousands, except percentages) |
|
|
|
|
|
|
|
|
||||||||
|
Net loss |
|
$ |
(53,093 |
) |
|
$ |
(31,239 |
) |
|
$ |
(38,146 |
) |
|
$ |
(10,274 |
) |
|
Add (deduct): |
|
|
|
|
|
|
|
|
||||||||
|
Depreciation and amortization |
|
|
17,224 |
|
|
|
13,915 |
|
|
|
52,378 |
|
|
|
48,969 |
|
|
Stock-based compensation expense |
|
|
19,333 |
|
|
|
17,308 |
|
|
|
84,294 |
|
|
|
76,857 |
|
|
Interest income |
|
|
(2,327 |
) |
|
|
(2,661 |
) |
|
|
(11,965 |
) |
|
|
(10,201 |
) |
|
Interest expense |
|
|
108 |
|
|
|
149 |
|
|
|
441 |
|
|
|
733 |
|
|
Other expense (income), net |
|
|
(4,864 |
) |
|
|
6,696 |
|
|
|
(9,371 |
) |
|
|
(15,473 |
) |
|
(Benefit from) provision for income taxes |
|
|
(9,193 |
) |
|
|
(1,306 |
) |
|
|
10,995 |
|
|
|
14,668 |
|
|
Legal and transaction related costs (1) |
|
|
182 |
|
|
|
2,944 |
|
|
|
7,383 |
|
|
|
32,950 |
|
|
Restructuring and abandonment costs (2) |
|
|
9,986 |
|
|
|
474 |
|
|
|
11,853 |
|
|
|
15,649 |
|
|
Adjusted EBITDA |
|
$ |
(22,644 |
) |
|
$ |
6,280 |
|
|
$ |
107,862 |
|
|
$ |
153,878 |
|
|
Revenue |
|
$ |
255,380 |
|
|
$ |
305,147 |
|
|
$ |
1,518,056 |
|
|
$ |
1,655,255 |
|
|
Net loss margin |
|
|
(20.8 |
)% |
|
|
(10.2 |
)% |
|
|
(2.5 |
)% |
|
|
(0.6 |
)% |
|
Adjusted EBITDA margin |
|
|
(8.9 |
)% |
|
|
2.1 |
% |
|
|
7.1 |
% |
|
|
9.3 |
% |
|
(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 relate to the restructuring plan we initiated on August 14, 2024 to reduce our cost base, including a reduction in force involving approximately 6% of our employees, and nominal remaining costs incurred related to the restructuring plan initiated on June 14, 2023. |
||||||||||||||||
|
Reconciliation of GAAP Net Loss to Non-GAAP Net (Loss) Income |
||||||||||||||||
|
(unaudited, in thousands, except share and per share amounts) |
||||||||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
September 28, |
|
September 30, |
|
September 28, |
|
September 30, |
||||||||
|
Reconciliation of GAAP net loss |
|
|
|
|
|
|
|
|
||||||||
|
GAAP net loss |
|
$ |
(53,093 |
) |
|
$ |
(31,239 |
) |
|
$ |
(38,146 |
) |
|
$ |
(10,274 |
) |
|
Stock-based compensation expense |
|
|
19,333 |
|
|
|
17,308 |
|
|
|
84,294 |
|
|
|
76,857 |
|
|
Legal and transaction related costs |
|
|
182 |
|
|
|
2,944 |
|
|
|
7,383 |
|
|
|
32,950 |
|
|
Amortization of intangibles |
|
|
1,494 |
|
|
|
1,493 |
|
|
|
5,972 |
|
|
|
6,182 |
|
|
Restructuring and abandonment costs |
|
|
9,986 |
|
|
|
474 |
|
|
|
11,853 |
|
|
|
15,649 |
|
|
Non-GAAP net (loss) income |
|
$ |
(22,098 |
) |
|
$ |
(9,020 |
) |
|
$ |
71,356 |
|
|
$ |
121,364 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Reconciliation of net loss per share |
|
|
|
|
|
|
|
|
||||||||
|
GAAP net loss per share, diluted |
|
$ |
(0.44 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.31 |
) |
|
$ |
(0.08 |
) |
|
Non-GAAP adjustments to net loss per share |
|
|
0.26 |
|
|
|
0.18 |
|
|
|
0.87 |
|
|
|
1.00 |
|
|
Non-GAAP net (loss) income per share, diluted |
|
$ |
(0.18 |
) |
|
$ |
(0.07 |
) |
|
$ |
0.56 |
|
|
$ |
0.92 |
|
|
Weighted-average shares used in GAAP per share calculation, diluted |
|
|
121,389,519 |
|
|
|
127,335,311 |
|
|
|
123,218,532 |
|
|
|
127,702,885 |
|
|
Weighted-average shares used in non-GAAP per share calculation, diluted |
|
|
121,389,519 |
|
|
|
127,335,311 |
|
|
|
126,783,859 |
|
|
|
131,947,092 |
|
|
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 |
|
Twelve Months Ended |
||||||||||||
|
|
|
September 28, |
|
September 30, |
|
September 28, |
|
September 30, |
||||||||
|
Cash flows (used in) provided by operating activities |
|
$ |
(37,734 |
) |
|
$ |
22,195 |
|
|
$ |
189,906 |
|
|
$ |
100,406 |
|
|
Less: Purchases of property and equipment |
|
|
(15,770 |
) |
|
|
(10,201 |
) |
|
|
(55,247 |
) |
|
|
(50,286 |
) |
|
Free cash flow |
|
$ |
(53,504 |
) |
|
$ |
11,994 |
|
|
$ |
134,659 |
|
|
$ |
50,120 |
|
|
Revenue by Product Category |
||||||||||||||||
|
(unaudited, dollars in thousands) |
||||||||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
September 28, |
|
September 30, |
|
September 28, |
|
September 30, |
||||||||
|
(In thousands) |
|
|
|
|
|
|
|
|
||||||||
|
Sonos speakers |
|
$ |
178,226 |
|
$ |
223,323 |
|
$ |
1,169,604 |
|
$ |
1,293,440 |
||||
|
Sonos system products |
|
|
58,731 |
|
|
62,316 |
|
|
267,744 |
|
|
285,064 |
||||
|
Partner products and other revenue |
|
|
18,423 |
|
|
19,508 |
|
|
80,708 |
|
|
76,751 |
||||
|
Total revenue |
|
$ |
255,380 |
|
$ |
305,147 |
|
$ |
1,518,056 |
|
$ |
1,655,255 |
||||
|
Revenue by Geographical Region |
||||||||||||||||
|
(unaudited, dollars in thousands) |
||||||||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
September 28, |
|
September 30, |
|
September 28, |
|
September 30, |
||||||||
|
Americas |
|
$ |
177,533 |
|
$ |
203,531 |
|
$ |
1,004,770 |
|
$ |
1,048,245 |
||||
|
Europe, Middle East and Africa |
|
|
58,353 |
|
|
83,374 |
|
|
430,428 |
|
|
518,179 |
||||
|
Asia Pacific |
|
|
19,494 |
|
|
18,242 |
|
|
82,858 |
|
|
88,831 |
||||
|
Total revenue |
|
$ |
255,380 |
|
$ |
305,147 |
|
$ |
1,518,056 |
|
$ |
1,655,255 |
||||
|
Stock-based Compensation |
||||||||||||||||
|
(unaudited, dollars in thousands) |
||||||||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
September 28, |
|
September 30, |
|
September 28, |
|
September 30, |
||||||||
|
(In thousands) |
|
|
|
|
|
|
|
|
||||||||
|
Cost of revenue |
|
$ |
620 |
|
$ |
437 |
|
$ |
2,614 |
|
$ |
2,038 |
||||
|
Research and development |
|
|
8,780 |
|
|
8,177 |
|
|
37,913 |
|
|
35,530 |
||||
|
Sales and marketing |
|
|
4,201 |
|
|
3,499 |
|
|
17,499 |
|
|
15,677 |
||||
|
General and administrative |
|
|
5,732 |
|
|
5,195 |
|
|
26,268 |
|
|
23,612 |
||||
|
Total stock-based compensation expense |
|
$ |
19,333 |
|
$ |
17,308 |
|
$ |
84,294 |
|
$ |
76,857 |
||||
|
Amortization of Intangibles |
||||||||||||||||
|
(unaudited, dollars in thousands) |
||||||||||||||||
|
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
September 28, |
|
September 30, |
|
September 28, |
|
September 30, |
||||||||
|
Cost of revenue |
|
$ |
973 |
|
$ |
973 |
|
$ |
3,891 |
|
$ |
4,103 |
||||
|
Research and development |
|
|
497 |
|
|
496 |
|
|
1,985 |
|
|
1,983 |
||||
|
Sales and marketing |
|
|
– |
|
|
– |
|
|
– |
|
|
– |
||||
|
General and administrative |
|
|
24 |
|
|
24 |
|
|
96 |
|
|
96 |
||||
|
Total amortization of intangibles |
|
$ |
1,494 |
|
$ |
1,493 |
|
$ |
5,972 |
|
$ |
6,182 |
||||
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.
Contacts
Investor Contact
James Baglanis
IR@sonos.com
Press Contact
Erin Pategas
PR@sonos.com
