Eddie Lazarus Appointed Chief Financial Officer
SANTA BARBARA, Calif.–(BUSINESS WIRE)–Sonos, Inc. (Nasdaq: SONO) today reported fourth quarter and fiscal 2022 results.
Fiscal 2022 Financial Highlights (unaudited)
- Revenue increased 2.1% year-over-year to $1,752.3 million; on a constant-currency basis, revenue increased approximately 4.9% year-over-year
- Gross margin decreased (180) basis points year-over-year to 45.4%
-
GAAP net income of $67.4 million compared to $158.6 million last year
- GAAP diluted earnings per share (EPS) of $0.49 compared to $1.13 last year
-
Non-GAAP net income1 of $165.9 million compared to $248.3 million last year
- Non-GAAP diluted EPS1 of $1.20 compared to $1.77 last year
-
Adjusted EBITDA of $226.5 million compared to $278.6 million last year
- Adjusted EBITDA margin of 12.9% compared to 16.2% last year
- Free cash flow of $(74.5) million. Cash flows (used) in operating activities of $28.3 million
Fourth Quarter 2022 Financial Highlights (unaudited)
- Revenue decreased 12.0% year-over-year to $316.3 million; on a constant-currency basis, revenue decreased approximately 6.6% year-over-year
- Gross margin decreased 720 basis points year-over-year to 39.2%
-
GAAP net (loss) of $(64.1) million compared to $(8.7) million last year
- GAAP diluted (loss) per share of $(0.50) compared to $(0.07) last year
-
Non-GAAP net (loss)1 of $(40.4) million compared to non-GAAP net income of $11.8 million last year
- Non-GAAP diluted (loss) per share1 of $(0.32) compared to $0.08 last year
-
Adjusted EBITDA of $(25.6) million compared to $17.1 million last year
- Adjusted EBITDA margin of (8.1%) compared to 4.8% last year
- Free cash flow of $(125.2) million. Cash flows (used) in operating activities of $103.9 million
Notes: 1 Non-GAAP net income/EPS and non-GAAP net (loss)/(loss) per share exclude stock-based compensation and legal and transaction related fees. See “Use of Non-GAAP Measures” and reconciliations to GAAP measures below.
“The macroeconomic backdrop became significantly more challenging in Fiscal 2022 and I am proud of our team’s tremendous efforts to deliver our 17th consecutive year of revenue growth. We grew the team to build on our leadership in existing categories, and pursue four additional categories, to ultimately capture more of the $96 billion global audio market. We were pleased to see trends stabilize in Q4, and head into the holidays with a good early response to our latest product, Sub Mini, and our healthiest in-stock inventory position in three years,” said Patrick Spence, CEO of Sonos.
Mr. Spence continued, “We will remain disciplined as we invest in the year ahead, and will take all necessary steps to protect the health of the business. My conviction in the long-term potential of Sonos has never been stronger. As these headwinds subside, I am confident that we will return to double-digit revenue growth.”
Sonos today announced that Eddie Lazarus, the Company’s interim Chief Financial Officer and Chief Legal Officer, has been appointed as Chief Financial Officer of the Company. A search will commence for a General Counsel who will assume the day-to-day responsibilities of the legal organization, reporting to Mr. Lazarus.
“Eddie has seamlessly transitioned into his expanded role and made an immediate impact on the organization,” said Mr. Spence. “I am confident that under his leadership we will execute on our strategic priorities, drive greater organizational efficiency and make continued progress toward delivering on our long term financial targets.”
Fiscal 2023 Outlook
- Revenue in the range of $1.7 billion to $1.8 billion, representing a decline of -3% to growth of 3% from fiscal 2022, or growth of 1% to 7% on a constant currency basis
- Gross margin in the range of 45.0% to 46.0%
- Adjusted EBITDA in the range of $145 million to $180 million, representing a decline of 36% to 21% from fiscal 2022
- Adjusted EBITDA margin of 8.5% to 10.0%
Fiscal 2022 Company Highlights (unaudited)
Key Metrics:
- Total households increased 11% to 14.0 million in fiscal 2022
- Existing households accounted for 44% of new product registrations in fiscal 2022
- Average number of registered products per household of 2.98 in fiscal 2022 vs 2.95 last year
- Listening hours increased 6% year-over-year to 12.8 billion
- Direct-to-consumer (DTC) revenue decreased 5% and represented 23% of total revenue
- New disclosure: Installer Solutions (IS) revenue increased 28% and represented 21% of total revenue
New Stock Repurchase Program
- As announced in a separate release today, the company’s Board of Directors has authorized a new common stock repurchase program of up to $100 million.
- Under its most recently completed repurchase program, the company repurchased $150 million in stock, representing 6.6 million shares at an average price of $22.80 per share, enabling the company to return capital to shareholders and offset dilution from compensation plans.
Strategic Initiatives
-
Expansion of our Ecosystem
- Mayht – Acquisition Announced April 2022: Mayht is a Netherlands-based company that has invented a new, revolutionary approach to audio transducers. Transducers are the foundational element within speakers that create sound, and Mayht has re-engineered them to enable smaller and lighter form factors while producing exceptional sound.
- Sonos Voice Control – May 2022: The first voice experience created purely for listening on Sonos. Designed with privacy at its core, Sonos Voice Control is the simplest way to control your music, offering complete command of your Sonos system using only your voice.
- Sonos Ray – June 2022 – $279 MSRP: Our entry-level, smart soundbar for TV, music and more.
- Sub Mini – September 2022 – $429 MSRP: The wireless subwoofer that sets a new standard in its category for powerful, balanced bass. Building on the award-winning design of Sub, Sub Mini delivers rich, clear low end in a more compact, cylindrical design.
-
Expansion of our Brand
- LFC delivered TV viewership of over 270M in Season 1/ FY22.
- ESPN delivered 205M impressions in its first season.
- Food52, a platform with a large female following, delivered more than 28M impressions by the end of FY22
- For the launch of Roam Colors, more than 170 advocates in the outdoor, travel and wellness spaces delivered inspiring video content showcasing how they Feel More with Sonos, resulting in more than 70M impressions in FY22
-
Responsibility and Innovation
- Recognized as one of the best places to work for LGBTQ+ equality by the Human Rights Campaign (HRC) Foundation.
- Publishing annual Listen Better Report on November 29th, highlighting the work we have done to improve our efforts as a responsible company. In FY22, we advanced our Climate Action Plan by conducting an annual assessment of our greenhouse gas emissions.
- Won two awards for our product packaging. First-place in 2022 Dieline Awards under the electronics, office, e-commerce, entertainment and self-promo category, and Industrial Designers Society of America IDEA 2022 Jury Chair Award for Sonos Global Packaging System.
- Won CIO 100 award for “IT in a Box.”
Supplemental Earnings Presentation
The company has posted a supplemental earnings presentation accompanying its fourth quarter and fiscal 2022 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 fourth quarter and fiscal 2022 results on November 16, 2022, 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 Income (Loss) |
||||||||||||||||
|
(unaudited, in thousands, except share and per share amounts) |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
Three Months Ended |
Twelve months ended |
||||||||||||||
|
|
October 1, |
October 2, |
October 1, |
October 2, |
||||||||||||
|
Revenue |
$ |
316,290 |
|
$ |
359,539 |
|
$ |
1,752,336 |
|
$ |
1,716,744 |
|
||||
|
Cost of revenue |
|
192,191 |
|
|
192,608 |
|
|
955,969 |
|
|
906,750 |
|
||||
|
Gross profit |
|
124,099 |
|
|
166,931 |
|
|
796,367 |
|
|
809,994 |
|
||||
|
Operating expenses |
|
|
|
|
||||||||||||
|
Research and development |
|
67,274 |
|
|
65,783 |
|
|
256,073 |
|
|
230,078 |
|
||||
|
Sales and marketing |
|
72,649 |
|
|
73,236 |
|
|
280,333 |
|
|
272,124 |
|
||||
|
General and administrative |
|
44,240 |
|
|
39,457 |
|
|
170,429 |
|
|
152,828 |
|
||||
|
Total operating expenses |
|
184,163 |
|
|
178,476 |
|
|
706,835 |
|
|
655,030 |
|
||||
|
Operating income |
|
(60,064 |
) |
|
(11,545 |
) |
|
89,532 |
|
|
154,964 |
|
||||
|
Other income (expense), net |
|
|
|
|
||||||||||||
|
Interest income |
|
1,070 |
|
|
33 |
|
|
1,655 |
|
|
146 |
|
||||
|
Interest expense |
|
(168 |
) |
|
(67 |
) |
|
(552 |
) |
|
(592 |
) |
||||
|
Other income (expense), net |
|
(8,364 |
) |
|
(2,271 |
) |
|
(21,905 |
) |
|
2,407 |
|
||||
|
Total other income (expense), net |
|
(7,462 |
) |
|
(2,305 |
) |
|
(20,802 |
) |
|
1,961 |
|
||||
|
Income (loss) before provision for (benefit from) income taxes |
|
(67,526 |
) |
|
(13,850 |
) |
|
68,730 |
|
|
156,925 |
|
||||
|
Provision for (benefit from) income taxes |
|
(3,459 |
) |
|
(5,106 |
) |
|
1,347 |
|
|
(1,670 |
) |
||||
|
Net income (loss) |
$ |
(64,067 |
) |
$ |
(8,744 |
) |
$ |
67,383 |
|
$ |
158,595 |
|
||||
|
|
|
|
|
|
||||||||||||
|
Net income (loss) attributable to common stockholders: |
|
|
|
|
||||||||||||
|
Basic and diluted |
$ |
(64,067 |
) |
$ |
(8,744 |
) |
$ |
67,383 |
|
$ |
158,595 |
|
||||
|
|
|
|
|
|
||||||||||||
|
Net income (loss) per share attributable to common stockholders: |
|
|
|
|
||||||||||||
|
Basic |
$ |
(0.50 |
) |
$ |
(0.07 |
) |
$ |
0.53 |
|
$ |
1.30 |
|
||||
|
Diluted |
$ |
(0.50 |
) |
$ |
(0.07 |
) |
$ |
0.49 |
|
$ |
1.13 |
|
||||
|
|
|
|
|
|
||||||||||||
|
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders: |
|
|
|
|
||||||||||||
|
Basic |
|
127,104,659 |
|
|
126,351,433 |
|
|
127,691,030 |
|
|
122,245,212 |
|
||||
|
Diluted |
|
127,104,659 |
|
|
126,351,433 |
|
|
137,762,078 |
|
|
140,309,152 |
|
||||
|
|
|
|
|
|
||||||||||||
|
Total comprehensive income (loss) |
|
|
|
|
||||||||||||
|
Net income (loss) |
$ |
(64,067 |
) |
$ |
(8,744 |
) |
$ |
67,383 |
|
$ |
158,595 |
|
||||
|
Change in foreign currency translation adjustment |
|
(249 |
) |
|
252 |
|
|
(2,221 |
) |
|
514 |
|
||||
|
Comprehensive income (loss) |
$ |
(64,316 |
) |
$ |
(8,492 |
) |
$ |
65,162 |
|
$ |
159,109 |
|
||||
|
Consolidated Balance Sheets |
||||||||
|
(unaudited, dollars in thousands, except par values) |
||||||||
|
|
As of |
|||||||
|
|
October 1, |
October 2, |
||||||
|
Assets |
|
|
||||||
|
Current assets: |
|
|
||||||
|
Cash and cash equivalents |
$ |
274,855 |
|
$ |
640,101 |
|
||
|
Accounts receivable, net of allowances |
|
101,206 |
|
|
100,779 |
|
||
|
Inventories |
|
454,288 |
|
|
185,130 |
|
||
|
Prepaids and other current assets |
|
37,042 |
|
|
31,504 |
|
||
|
Total current assets |
|
867,391 |
|
|
957,514 |
|
||
|
Property and equipment, net |
|
86,168 |
|
|
71,341 |
|
||
|
Operating lease right-of-use assets |
|
28,329 |
|
|
33,841 |
|
||
|
Goodwill |
|
77,300 |
|
|
15,545 |
|
||
|
Intangible assets, net: |
|
|
||||||
|
In-process research and development |
|
64,680 |
|
|
20,100 |
|
||
|
Other intangible assets |
|
26,384 |
|
|
4,350 |
|
||
|
Deferred tax assets |
|
1,508 |
|
|
10,028 |
|
||
|
Other noncurrent assets |
|
36,628 |
|
|
26,085 |
|
||
|
Total assets |
$ |
1,188,388 |
|
$ |
1,138,804 |
|
||
|
Liabilities and stockholders’ equity |
|
|
||||||
|
Current liabilities: |
|
|
||||||
|
Accounts payable |
$ |
335,758 |
|
$ |
214,996 |
|
||
|
Accrued expenses |
|
109,290 |
|
|
108,029 |
|
||
|
Accrued compensation |
|
23,624 |
|
|
77,695 |
|
||
|
Deferred revenue, current |
|
27,318 |
|
|
35,866 |
|
||
|
Other current liabilities |
|
39,649 |
|
|
39,544 |
|
||
|
Total current liabilities |
|
535,639 |
|
|
476,130 |
|
||
|
Operating lease liabilities, noncurrent |
|
25,596 |
|
|
33,960 |
|
||
|
Deferred revenue, noncurrent |
|
56,152 |
|
|
53,632 |
|
||
|
Deferred tax liabilities |
|
9,642 |
|
|
2,394 |
|
||
|
Other noncurrent liabilities |
|
846 |
|
|
3,646 |
|
||
|
Total liabilities |
|
627,875 |
|
|
569,762 |
|
||
|
Stockholders’ equity: |
|
|
||||||
|
Common stock, $0.001 par value |
|
130 |
|
|
129 |
|
||
|
Treasury stock |
|
(50,896 |
) |
|
(50,276 |
) |
||
|
Additional paid-in capital |
|
617,390 |
|
|
690,462 |
|
||
|
Accumulated deficit |
|
(2,514 |
) |
|
(69,897 |
) |
||
|
Accumulated other comprehensive loss |
|
(3,597 |
) |
|
(1,376 |
) |
||
|
Total stockholders’ equity |
|
560,513 |
|
|
569,042 |
|
||
|
Total liabilities and stockholders’ equity |
$ |
1,188,388 |
|
$ |
1,138,804 |
|
||
|
Consolidated Statements of Cash Flows |
||||||||
|
(unaudited, dollars in thousands) |
||||||||
|
|
Twelve months ended |
|||||||
|
|
October 1, |
October 2, |
||||||
|
Cash flows from operating activities |
|
|
||||||
|
Net income |
$ |
67,383 |
|
$ |
158,595 |
|
||
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
||||||
|
Depreciation and amortization |
|
38,504 |
|
|
33,882 |
|
||
|
Impairment and abandonment |
|
62 |
|
|
3,552 |
|
||
|
Stock-based compensation expense |
|
75,640 |
|
|
62,127 |
|
||
|
Other |
|
10,919 |
|
|
1,951 |
|
||
|
Deferred income taxes |
|
(1,508 |
) |
|
(8,330 |
) |
||
|
Foreign currency transaction (gain) loss |
|
10,775 |
|
|
(1,108 |
) |
||
|
Changes in operating assets and liabilities: |
|
|
||||||
|
Accounts receivable, net |
|
(5,513 |
) |
|
(45,697 |
) |
||
|
Inventories |
|
(277,489 |
) |
|
(7,911 |
) |
||
|
Other assets |
|
(16,604 |
) |
|
(30,009 |
) |
||
|
Accounts payable and accrued expenses |
|
129,686 |
|
|
26,231 |
|
||
|
Accrued compensation |
|
(52,904 |
) |
|
33,447 |
|
||
|
Deferred revenue |
|
(1,667 |
) |
|
27,587 |
|
||
|
Other liabilities |
|
(5,544 |
) |
|
(1,091 |
) |
||
|
Net cash provided by (used in) operating activities |
|
(28,260 |
) |
|
253,226 |
|
||
|
Cash flows from investing activities |
|
|
||||||
|
Purchases of property and equipment, intangible and other assets |
|
(46,216 |
) |
|
(45,531 |
) |
||
|
Cash paid for acquisitions, net of acquired cash |
|
(126,416 |
) |
|
— |
|
||
|
Net cash used in investing activities |
|
(172,632 |
) |
|
(45,531 |
) |
||
|
Cash flows from financing activities |
|
|
||||||
|
Payments for debt issuance costs |
|
(929 |
) |
|
||||
|
Proceeds from exercise of stock options |
|
40,443 |
|
|
147,818 |
|
||
|
Payments for repurchase of common stock |
|
(150,121 |
) |
|
(50,014 |
) |
||
|
Payments for repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock units |
|
(39,653 |
) |
|
(47,837 |
) |
||
|
Payments of borrowings |
|
— |
|
|
(25,000 |
) |
||
|
Net cash provided by (used in) financing activities |
|
(150,260 |
) |
|
24,967 |
|
||
|
Effect of exchange rate changes on cash and cash equivalents |
|
(14,094 |
) |
|
148 |
|
||
|
Net increase (decrease) in cash and cash equivalents |
|
(365,246 |
) |
|
232,810 |
|
||
|
Cash and cash equivalents |
|
|
||||||
|
Beginning of period |
|
640,101 |
|
|
407,291 |
|
||
|
End of period |
$ |
274,855 |
|
$ |
640,101 |
|
||
|
Supplemental disclosure |
|
|
||||||
|
Cash paid for interest |
$ |
344 |
|
$ |
502 |
|
||
|
Cash paid for taxes, net of refunds |
$ |
9,306 |
|
$ |
4,114 |
|
||
|
Cash paid for amounts included in the measurement of lease liabilities |
$ |
14,636 |
|
$ |
18,657 |
|
||
|
Supplemental disclosure of non-cash investing and financing activities |
|
|
||||||
|
Purchases of property and equipment in accounts payable and accrued expenses |
$ |
9,112 |
|
$ |
5,653 |
|
||
|
Right-of-use assets obtained in exchange for new operating lease liabilities |
$ |
5,054 |
|
$ |
2,010 |
|
||
|
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
||||||||||||||||
|
(unaudited, dollars in thousands except percentages) |
||||||||||||||||
|
|
Three Months Ended |
Twelve months ended |
||||||||||||||
|
|
October 1, |
October 2, |
October 1, |
October 2, |
||||||||||||
|
Net income (loss) |
$ |
(64,067 |
) |
$ |
(8,744 |
) |
$ |
67,383 |
|
$ |
158,595 |
|
||||
|
Add (deduct): |
|
|
|
|
||||||||||||
|
Depreciation and amortization |
|
10,805 |
|
|
8,093 |
|
|
38,504 |
|
|
33,882 |
|
||||
|
Stock-based compensation expense |
|
18,177 |
|
|
15,372 |
|
|
75,640 |
|
|
62,127 |
|
||||
|
Interest income |
|
(1,070 |
) |
|
(33 |
) |
|
(1,655 |
) |
|
(146 |
) |
||||
|
Interest expense |
|
168 |
|
|
67 |
|
|
552 |
|
|
592 |
|
||||
|
Other (income) expense, net |
|
8,364 |
|
|
2,271 |
|
|
21,905 |
|
|
(2,407 |
) |
||||
|
Provision for (benefit from) income taxes |
|
(3,459 |
) |
|
(5,106 |
) |
|
1,347 |
|
|
(1,670 |
) |
||||
|
Restructuring and related expenses(1) |
|
— |
|
|
165 |
|
|
— |
|
|
(2,446 |
) |
||||
|
Legal and transaction related costs(2) |
|
5,529 |
|
|
5,028 |
|
|
22,873 |
|
|
30,058 |
|
||||
|
Adjusted EBITDA |
$ |
(25,553 |
) |
$ |
17,113 |
|
$ |
226,549 |
|
$ |
278,585 |
|
||||
|
Revenue |
$ |
316,290 |
|
$ |
359,539 |
|
$ |
1,752,336 |
|
$ |
1,716,744 |
|
||||
|
Adjusted EBITDA margin |
|
(8.1 |
)% |
|
4.8 |
% |
|
12.9 |
% |
|
16.2 |
% |
||||
|
(1) |
Restructuring and related expenses for the twelve months ended October 2, 2021, include a gain of $2.8 million, related to our negotiation for the early termination of a facility lease that was part of the 2020 restructuring plan. The gain represents the difference between the related operating lease liability and previously accrued restructuring expenses versus the early termination payment. |
|
|
(2) |
Legal and transaction related costs consist of expenses related to our intellectual property litigation against Alphabet Inc. and Google LLC as well as legal and transaction costs associated with our acquisition activity, which we do not consider representative of our underlying operating performance. |
|
| Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Loss) | ||||||||||||||||
|
(unaudited, in thousands, except share and per share amounts) |
||||||||||||||||
|
|
Three Months Ended |
|
Twelve months ended |
|||||||||||||
|
|
October 1, |
|
October 2, |
|
October 1, |
|
October 2, |
|||||||||
|
Reconciliation of GAAP net income (loss) |
|
|
|
|
||||||||||||
|
GAAP net income (loss) |
$ |
(64,067 |
) |
$ |
(8,744 |
) |
$ |
67,383 |
$ |
158,595 |
|
|||||
|
Stock-based compensation expense |
|
18,177 |
|
|
15,372 |
|
|
75,640 |
|
|
62,127 |
|
||||
|
Restructuring and related expenses |
|
— |
|
|
165 |
|
|
— |
|
|
(2,446 |
) |
||||
|
Legal and transaction related costs |
|
5,529 |
|
|
5,028 |
|
|
22,873 |
|
|
30,058 |
|
||||
|
Non-GAAP net income (loss) |
$ |
(40,361 |
) |
$ |
11,821 |
|
$ |
165,896 |
|
$ |
248,334 |
|
||||
|
|
|
|
|
|
||||||||||||
|
Reconciliation of net income (loss) per share |
|
|
|
|
||||||||||||
|
GAAP net income (loss) per share, diluted |
$ |
(0.50 |
) |
$ |
(0.07 |
) |
$ |
0.49 |
|
$ |
1.13 |
|
||||
|
Non-GAAP adjustments to net income (loss) per share |
$ |
0.19 |
|
$ |
0.15 |
|
$ |
0.72 |
|
$ |
0.64 |
|
||||
|
Non-GAAP net income (loss) per share, diluted |
$ |
(0.32 |
) |
$ |
0.08 |
|
$ |
1.20 |
|
$ |
1.77 |
|
||||
|
Weighted-average shares used in GAAP and non-GAAP per share calculation, diluted |
|
127,104,659 |
|
|
126,351,433 |
|
|
137,762,078 |
|
|
140,309,152 |
|
||||
|
Note: Certain figures may not sum due to rounding |
||||||||||||||||
|
Reconciliation of Cash Flows Provided by (Used in) Operating Activities to Free Cash Flow |
||||||||||||||||
|
(unaudited, dollars in thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
Twelve months ended |
|||||||||||||
|
|
October 1, |
|
October 2, |
|
October 1, |
|
October 2, |
|||||||||
|
Cash flows provided by (used in) operating activities |
$ |
(103,917 |
) |
$ |
6,486 |
|
$ |
(28,260 |
) |
$ |
253,226 |
|
||||
|
Less: Purchases of property and equipment, intangible and other assets |
|
(21,269 |
) |
|
(10,739 |
) |
|
(46,216 |
) |
|
(45,531 |
) |
||||
|
Free cash flow |
$ |
(125,186 |
) |
$ |
(4,253 |
) |
$ |
(74,476 |
) |
$ |
207,695 |
|
||||
|
Revenue by Product Category |
||||||||||||||||
|
(unaudited, dollars in thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
Twelve months ended |
|||||||||||||
|
|
October 1, |
|
October 2, |
|
October 1, |
|
October 2, |
|||||||||
|
Sonos speakers |
$ |
235,091 |
$ |
273,525 |
$ |
1,368,916 |
$ |
1,378,808 |
||||||||
|
Sonos system products |
|
62,782 |
|
67,738 |
|
297,110 |
|
265,180 |
||||||||
|
Partner products and other revenue |
|
18,417 |
|
18,276 |
|
86,310 |
|
72,756 |
||||||||
|
Total revenue |
$ |
316,290 |
$ |
359,539 |
$ |
1,752,336 |
$ |
1,716,744 |
||||||||
|
Revenue by Geographical Region |
||||||||||||||||
|
(unaudited, dollars in thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
Twelve months ended |
|||||||||||||
|
|
October 1, |
|
October 2, |
|
October 1, |
|
October 2, |
|||||||||
|
Americas |
$ |
199,686 |
$ |
196,034 |
$ |
1,044,113 |
$ |
980,931 |
||||||||
|
Europe, Middle East and Africa |
|
91,438 |
|
|
137,936 |
|
|
578,034 |
|
|
618,476 |
|
||||
|
Asia Pacific |
|
25,166 |
|
|
25,569 |
|
|
130,189 |
|
|
117,337 |
|
||||
|
Total revenue |
$ |
316,290 |
|
$ |
359,539 |
|
$ |
1,752,336 |
|
$ |
1,716,744 |
|
||||
|
Stock-based Compensation |
||||||||||||||||
|
(unaudited, dollars in thousands) |
||||||||||||||||
|
|
Three Months Ended |
Twelve months ended |
||||||||||||||
|
|
October 1, |
October 2, |
October 1, |
October 2, |
||||||||||||
|
Cost of revenue |
$ |
467 |
$ |
265 |
$ |
1,620 |
$ |
988 |
||||||||
|
Research and development |
|
8,037 |
|
|
6,008 |
|
|
30,724 |
|
|
25,075 |
|
||||
|
Sales and marketing |
|
3,685 |
|
|
3,253 |
|
|
15,335 |
|
|
13,570 |
|
||||
|
General and administrative |
|
5,988 |
|
|
5,846 |
|
|
27,961 |
|
|
22,494 |
|
||||
|
Total stock-based compensation expense |
$ |
18,177 |
|
$ |
15,372 |
|
$ |
75,640 |
|
$ |
62,127 |
|
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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, net income (loss) excluding stock-based compensation and legal and transaction related fees and diluted earnings (loss) per share excluding stock-based compensation and legal and transaction related fees. 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 adjusted to exclude the impact of depreciation, stock-based compensation expense, interest income, interest expense, other income (expense), income taxes 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 and intangible and other assets. We calculate non-GAAP net income (loss) excluding stock-based compensation and legal and transaction related fees as net income (loss) less stock-based compensation and legal and transaction related fees. We calculate non-GAAP diluted earnings (loss) per share excluding stock-based compensation and legal and transaction related fees as net income (loss) less stock-based compensation and legal and transaction related fees divided by our number of shares at fiscal year end. We calculate constant currency growth percentages by translating our prior period financial results using the current period average currency exchange rates and comparing these amounts to our current period reported results. 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 30, 2023, our long-term outlook, our long-term focus, financial, growth and business strategies and opportunities, growth metrics and targets, our business model, new products, services and partnerships, profitability and gross margins, market growth and our market share, the macroeconomic environment and our ability to weather it, and other factors affecting variability in our financial results.
Contacts
Investor Contact
James Baglanis
IR@sonos.com
Press Contact
Tom Lodge
PR@sonos.com
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