|
|
(Mark One)
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
03-0479476
|
(State or other jurisdiction
of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
614 Chapala Street
Santa Barbara, CA 93101
(805) 965-3001
|
|
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.0001 par value
|
SONO
|
The Nasdaq Stock Market LLC
|
Large accelerated filer
¨
|
|
|
|
Accelerated filer
¨
|
|
|
Non-accelerated filer
x
|
|
|
|
Smaller reporting company
¨
|
|
|
|
|
|
|
Emerging growth company
¨
|
|
|
If an emerging growth company indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨
|
|
|
|
|
|
|
|
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
SONOS, INC.
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||
(unaudited, in thousands, except par values)
|
|||||||
|
|
|
|
||||
|
As of
|
||||||
|
June 29,
2019 |
|
September 29,
2018 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
338,292
|
|
|
$
|
220,930
|
|
Restricted cash
|
186
|
|
|
190
|
|
||
Accounts receivable, net of allowances
|
91,333
|
|
|
73,214
|
|
||
Inventories
|
121,225
|
|
|
193,193
|
|
||
Prepaids and other current assets
|
15,363
|
|
|
10,073
|
|
||
Total current assets
|
566,399
|
|
|
497,600
|
|
||
Property and equipment, net
|
72,856
|
|
|
85,371
|
|
||
Deferred tax assets
|
1,056
|
|
|
941
|
|
||
Other noncurrent assets
|
3,607
|
|
|
3,586
|
|
||
Total assets
|
$
|
643,918
|
|
|
$
|
587,498
|
|
|
|
|
|
||||
Liabilities and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
153,478
|
|
|
$
|
195,159
|
|
Accrued expenses
|
46,562
|
|
|
38,687
|
|
||
Accrued compensation
|
34,300
|
|
|
33,371
|
|
||
Short-term debt
|
11,667
|
|
|
6,667
|
|
||
Deferred revenue
|
13,349
|
|
|
11,615
|
|
||
Other current liabilities
|
16,146
|
|
|
10,858
|
|
||
Total current liabilities
|
275,502
|
|
|
296,357
|
|
||
Long-term debt
|
28,154
|
|
|
33,097
|
|
||
Deferred revenue
|
42,757
|
|
|
39,352
|
|
||
Other noncurrent liabilities
|
9,080
|
|
|
10,334
|
|
||
Total liabilities
|
355,493
|
|
|
379,140
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 7)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.001 par value
|
107
|
|
|
101
|
|
||
Treasury stock
|
(11,904
|
)
|
|
(11,072
|
)
|
||
Additional paid-in capital
|
480,170
|
|
|
424,617
|
|
||
Accumulated deficit
|
(178,777
|
)
|
|
(203,611
|
)
|
||
Accumulated other comprehensive loss
|
(1,171
|
)
|
|
(1,677
|
)
|
||
Total stockholders’ equity
|
288,425
|
|
|
208,358
|
|
||
Total liabilities and stockholders’ equity
|
$
|
643,918
|
|
|
$
|
587,498
|
|
SONOS, INC.
|
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||
(unaudited, in thousands, except share and per share amounts)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29,
2019 |
|
June 30,
2018 |
|
June 29,
2019 |
|
June 30,
2018 |
||||||||
Revenue
|
$
|
260,119
|
|
|
$
|
208,398
|
|
|
$
|
966,663
|
|
|
$
|
864,069
|
|
Cost of revenue
|
142,749
|
|
|
112,909
|
|
|
563,591
|
|
|
491,037
|
|
||||
Gross profit
|
117,370
|
|
|
95,489
|
|
|
403,072
|
|
|
373,032
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Research and development
|
44,355
|
|
|
35,444
|
|
|
121,530
|
|
|
104,209
|
|
||||
Sales and marketing
|
61,482
|
|
|
60,819
|
|
|
176,705
|
|
|
214,077
|
|
||||
General and administrative
|
26,583
|
|
|
20,860
|
|
|
74,308
|
|
|
63,822
|
|
||||
Total operating expenses
|
132,420
|
|
|
117,123
|
|
|
372,543
|
|
|
382,108
|
|
||||
Operating income (loss)
|
(15,050
|
)
|
|
(21,634
|
)
|
|
30,529
|
|
|
(9,076
|
)
|
||||
Other income (expense), net
|
|
|
|
|
|
|
|
||||||||
Interest income (expense), net
|
806
|
|
|
(1,116
|
)
|
|
1,019
|
|
|
(3,367
|
)
|
||||
Other income (expense), net
|
1,068
|
|
|
(3,744
|
)
|
|
(3,640
|
)
|
|
(315
|
)
|
||||
Total other income (expense), net
|
1,874
|
|
|
(4,860
|
)
|
|
(2,621
|
)
|
|
(3,682
|
)
|
||||
Income (loss) before provision for income taxes
|
(13,176
|
)
|
|
(26,494
|
)
|
|
27,908
|
|
|
(12,758
|
)
|
||||
Provision for income taxes
|
833
|
|
|
494
|
|
|
3,074
|
|
|
1,126
|
|
||||
Net income (loss)
|
$
|
(14,009
|
)
|
|
$
|
(26,988
|
)
|
|
$
|
24,834
|
|
|
$
|
(13,884
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(14,009
|
)
|
|
$
|
(26,988
|
)
|
|
$
|
24,834
|
|
|
$
|
(13,884
|
)
|
Diluted
|
$
|
(14,009
|
)
|
|
$
|
(26,988
|
)
|
|
$
|
24,834
|
|
|
$
|
(13,884
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.13
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.24
|
|
|
$
|
(0.23
|
)
|
Diluted
|
$
|
(0.13
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.22
|
|
|
$
|
(0.23
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Basic
|
105,522,313
|
|
|
60,074,763
|
|
|
102,667,316
|
|
|
59,484,761
|
|
||||
Diluted
|
105,522,313
|
|
|
60,074,763
|
|
|
112,542,998
|
|
|
59,484,761
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(14,009
|
)
|
|
$
|
(26,988
|
)
|
|
$
|
24,834
|
|
|
$
|
(13,884
|
)
|
Change in foreign currency translation adjustment
|
(663
|
)
|
|
162
|
|
|
506
|
|
|
523
|
|
||||
Comprehensive income (loss)
|
$
|
(14,672
|
)
|
|
$
|
(26,826
|
)
|
|
$
|
25,340
|
|
|
$
|
(13,361
|
)
|
SONOS, INC.
|
|||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||||||||||||||
(unaudited, in thousands, except share amounts)
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Three Months Ended June 29, 2019
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury Stock
|
|
Accumulated
Deficit
|
|
Accumulated
Other Comprehensive
Loss
|
|
Total
Stockholders’ Equity |
||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
||||||||||||||||||
Balance at March 30, 2019
|
105,692,632
|
|
|
$
|
106
|
|
|
$
|
463,677
|
|
|
(861,354
|
)
|
|
$
|
(11,638
|
)
|
|
$
|
(164,768
|
)
|
|
$
|
(508
|
)
|
|
$
|
286,869
|
|
Issuance of common stock pursuant to equity incentive plans
|
1,481,047
|
|
|
1
|
|
|
3,085
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,086
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,565
|
)
|
|
(266
|
)
|
|
—
|
|
|
—
|
|
|
(266
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
13,408
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,408
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,009
|
)
|
|
—
|
|
|
(14,009
|
)
|
||||||
Change in foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(663
|
)
|
|
(663
|
)
|
||||||
Balance at June 29, 2019
|
107,173,679
|
|
|
$
|
107
|
|
|
$
|
480,170
|
|
|
(886,919
|
)
|
|
$
|
(11,904
|
)
|
|
$
|
(178,777
|
)
|
|
$
|
(1,171
|
)
|
|
$
|
288,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Redeemable Convertible Preferred Stock
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury Stock
|
|
Accumulated
Deficit
|
|
Accumulated
Other Comprehensive
Loss
|
|
Total
Stockholders’ Equity |
|||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||||
Balance at March 31, 2018
|
32,482,590
|
|
|
$
|
90,341
|
|
|
|
60,707,232
|
|
|
$
|
61
|
|
|
$
|
223,720
|
|
|
(799,174
|
)
|
|
$
|
(10,953
|
)
|
|
$
|
(174,903
|
)
|
|
$
|
(1,804
|
)
|
|
$
|
36,121
|
|
Issuance of common stock pursuant to equity incentive plans
|
—
|
|
|
—
|
|
|
|
367,854
|
|
|
—
|
|
|
1,391
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,391
|
|
|||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,866
|
)
|
|
(119
|
)
|
|
—
|
|
|
—
|
|
|
(119
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
10,333
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,333
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,988
|
)
|
|
—
|
|
|
(26,988
|
)
|
|||||||
Change in foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
162
|
|
|
162
|
|
|||||||
Balance at June 30, 2018
|
32,482,590
|
|
|
$
|
90,341
|
|
|
|
61,075,086
|
|
|
$
|
61
|
|
|
$
|
235,444
|
|
|
(807,040
|
)
|
|
$
|
(11,072
|
)
|
|
$
|
(201,891
|
)
|
|
$
|
(1,642
|
)
|
|
$
|
20,900
|
|
SONOS, INC.
|
|||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
|
|||||||||||||||||||||||||||||
(unaudited, in thousands, except share amounts)
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Nine Months Ended June 29, 2019
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury Stock
|
|
Accumulated
Deficit
|
|
Accumulated
Other Comprehensive
Loss
|
|
Total
Stockholders’ Equity |
||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
||||||||||||||||||
Balance at September 29, 2018
|
100,868,250
|
|
|
$
|
101
|
|
|
$
|
424,617
|
|
|
(807,040
|
)
|
|
$
|
(11,072
|
)
|
|
$
|
(203,611
|
)
|
|
$
|
(1,677
|
)
|
|
$
|
208,358
|
|
Issuance of common stock pursuant to equity incentive plans
|
6,305,429
|
|
|
6
|
|
|
22,028
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,034
|
|
||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(79,879
|
)
|
|
(832
|
)
|
|
—
|
|
|
—
|
|
|
(832
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
33,525
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,525
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,834
|
|
|
—
|
|
|
24,834
|
|
||||||
Change in foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
506
|
|
|
506
|
|
||||||
Balance at June 29, 2019
|
107,173,679
|
|
|
$
|
107
|
|
|
$
|
480,170
|
|
|
(886,919
|
)
|
|
$
|
(11,904
|
)
|
|
$
|
(178,777
|
)
|
|
$
|
(1,171
|
)
|
|
$
|
288,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended June 30, 2018
|
||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Redeemable Convertible Preferred Stock
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Treasury Stock
|
|
Accumulated
Deficit
|
|
Accumulated
Other Comprehensive
Loss
|
|
Total
Stockholders’ Equity |
|||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||||||||
Balance at September 30, 2017
|
32,482,590
|
|
|
$
|
90,341
|
|
|
|
59,339,336
|
|
|
$
|
59
|
|
|
$
|
200,301
|
|
|
(746,462
|
)
|
|
$
|
(10,161
|
)
|
|
$
|
(188,007
|
)
|
|
$
|
(2,165
|
)
|
|
$
|
27
|
|
Issuance of common stock pursuant to equity incentive plans
|
—
|
|
|
—
|
|
|
|
1,735,750
|
|
|
2
|
|
|
5,746
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,748
|
|
|||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,578
|
)
|
|
(911
|
)
|
|
—
|
|
|
—
|
|
|
(911
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
29,397
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,397
|
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,884
|
)
|
|
—
|
|
|
(13,884
|
)
|
|||||||
Change in foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
523
|
|
|
523
|
|
|||||||
Balance at June 30, 2018
|
32,482,590
|
|
|
$
|
90,341
|
|
|
|
61,075,086
|
|
|
$
|
61
|
|
|
$
|
235,444
|
|
|
(807,040
|
)
|
|
$
|
(11,072
|
)
|
|
$
|
(201,891
|
)
|
|
$
|
(1,642
|
)
|
|
$
|
20,900
|
|
SONOS, INC.
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(unaudited, in thousands)
|
|||||||
|
|
|
|
||||
|
Nine Months Ended
|
||||||
|
June 29,
2019 |
|
June 30,
2018 |
||||
Cash flows from operating activities
|
|
|
|
||||
Net income (loss)
|
$
|
24,834
|
|
|
$
|
(13,884
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities
|
|
|
|
||||
Depreciation
|
27,403
|
|
|
28,647
|
|
||
Stock-based compensation expense
|
33,525
|
|
|
29,397
|
|
||
Other
|
1,962
|
|
|
639
|
|
||
Deferred income taxes
|
(129
|
)
|
|
117
|
|
||
Foreign currency transaction loss
|
1,430
|
|
|
301
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(19,114
|
)
|
|
(5,659
|
)
|
||
Inventories, net
|
69,683
|
|
|
(79
|
)
|
||
Other assets
|
(5,434
|
)
|
|
(4,901
|
)
|
||
Accounts payable and accrued expenses
|
(33,680
|
)
|
|
(24,357
|
)
|
||
Accrued compensation
|
1,091
|
|
|
(4,237
|
)
|
||
Deferred revenue
|
5,279
|
|
|
10,342
|
|
||
Other liabilities
|
4,086
|
|
|
(534
|
)
|
||
Net cash provided by operating activities
|
110,936
|
|
|
15,792
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Purchases of property and equipment
|
(14,092
|
)
|
|
(25,927
|
)
|
||
Net cash used in investing activities
|
(14,092
|
)
|
|
(25,927
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from borrowings, net of borrowing costs
|
—
|
|
|
30,000
|
|
||
Repayments of borrowings
|
—
|
|
|
(30,000
|
)
|
||
Payments for purchase of treasury stock
|
(832
|
)
|
|
(911
|
)
|
||
Proceeds from exercise of common stock options
|
22,034
|
|
|
5,748
|
|
||
Payments of offering costs
|
(585
|
)
|
|
(2,154
|
)
|
||
Net cash provided by financing activities
|
20,617
|
|
|
2,683
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(103
|
)
|
|
1,289
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
117,358
|
|
|
(6,163
|
)
|
||
Cash, cash equivalents and restricted cash
|
|
|
|
||||
Beginning of period
|
221,120
|
|
|
130,788
|
|
||
End of period
|
$
|
338,478
|
|
|
$
|
124,625
|
|
Supplemental disclosure
|
|
|
|
||||
Cash paid for interest
|
$
|
1,334
|
|
|
$
|
3,596
|
|
Cash paid for taxes, net of refunds
|
$
|
2,534
|
|
|
$
|
1,251
|
|
Supplemental disclosure of non-cash investing and financing activities
|
|
|
|
||||
Purchases of property and equipment in accounts payable and accrued expenses
|
$
|
6,053
|
|
|
$
|
7,187
|
|
Deferred offering costs in accounts payable and accrued expenses
|
$
|
—
|
|
|
$
|
972
|
|
|
June 29, 2019
|
||||||||||||||
(In thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds (cash equivalents)
|
$
|
266,326
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
266,326
|
|
|
September 29, 2018
|
||||||||||||||
(In thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds (cash equivalents)
|
$
|
140,588
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
140,588
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
||||||||
Americas
|
$
|
145,612
|
|
|
$
|
122,982
|
|
|
$
|
520,684
|
|
|
$
|
447,705
|
|
Europe, Middle East and Africa (“EMEA”)
|
88,151
|
|
|
75,585
|
|
|
383,537
|
|
|
374,790
|
|
||||
Asia Pacific (“APAC”)
|
26,356
|
|
|
9,831
|
|
|
62,442
|
|
|
41,574
|
|
||||
Total revenue
|
$
|
260,119
|
|
|
$
|
208,398
|
|
|
$
|
966,663
|
|
|
$
|
864,069
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
134,924
|
|
|
$
|
113,558
|
|
|
$
|
481,888
|
|
|
$
|
409,701
|
|
Germany
|
20,636
|
|
|
18,512
|
|
|
96,775
|
|
|
95,720
|
|
||||
United Kingdom
|
19,810
|
|
|
17,930
|
|
|
90,036
|
|
|
88,421
|
|
||||
Other countries
|
84,749
|
|
|
58,398
|
|
|
297,964
|
|
|
270,227
|
|
||||
Total revenue
|
$
|
260,119
|
|
|
$
|
208,398
|
|
|
$
|
966,663
|
|
|
$
|
864,069
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
||||||||
Wireless speakers
|
$
|
104,626
|
|
|
$
|
93,867
|
|
|
$
|
401,994
|
|
|
$
|
453,185
|
|
Home theater speakers
|
89,660
|
|
|
66,732
|
|
|
388,902
|
|
|
283,952
|
|
||||
Components
|
48,135
|
|
|
42,283
|
|
|
137,539
|
|
|
113,530
|
|
||||
Other
|
17,698
|
|
|
5,516
|
|
|
38,228
|
|
|
13,402
|
|
||||
Total revenue
|
$
|
260,119
|
|
|
$
|
208,398
|
|
|
$
|
966,663
|
|
|
$
|
864,069
|
|
|
June 29, 2019
|
|
September 29, 2018
|
||||
(In thousands)
|
|
|
|
||||
Accounts receivable
|
$
|
110,507
|
|
|
$
|
85,840
|
|
Allowance for doubtful accounts
|
(1,069
|
)
|
|
(872
|
)
|
||
Allowance for sales incentives
|
(18,105
|
)
|
|
(11,754
|
)
|
||
Accounts receivable, net of allowances
|
$
|
91,333
|
|
|
$
|
73,214
|
|
|
June 29, 2019
|
|
September 29, 2018
|
||||
(In thousands)
|
|
|
|
||||
Finished goods
|
$
|
104,078
|
|
|
$
|
176,181
|
|
Component parts
|
17,147
|
|
|
17,012
|
|
||
Inventories
|
$
|
121,225
|
|
|
$
|
193,193
|
|
|
June 29, 2019
|
|
September 29, 2018
|
||||
(In thousands)
|
|
|
|
||||
Accrued advertising and marketing
|
$
|
17,707
|
|
|
$
|
11,613
|
|
Accrued taxes
|
4,999
|
|
|
4,175
|
|
||
Accrued inventory
|
1,723
|
|
|
4,179
|
|
||
Accrued manufacturing, logistics and product development
|
9,348
|
|
|
8,290
|
|
||
Accrued general and administrative expenses
|
7,413
|
|
|
3,322
|
|
||
Other accrued payables
|
5,372
|
|
|
7,108
|
|
||
Total accrued expenses
|
$
|
46,562
|
|
|
$
|
38,687
|
|
|
June 29, 2019
|
|
June 30, 2018
|
||||
|
|
|
|
||||
(In thousands)
|
|
|
|
||||
Deferred revenue, beginning of period
|
$
|
50,967
|
|
|
$
|
45,567
|
|
Recognition of revenue included in beginning of period deferred revenue
|
(8,827
|
)
|
|
(8,367
|
)
|
||
Revenue deferred, net of revenue recognized on contracts in the respective period
|
13,966
|
|
|
18,594
|
|
||
Deferred revenue, end of period
|
$
|
56,106
|
|
|
$
|
55,794
|
|
|
For the fiscal years ending
|
|
|
||||||||||||||||||||
|
2019
|
|
2020
|
|
|
2021
|
|
2022
|
|
2023 and Beyond
|
|
Total
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deferred revenue expected to be recognized
|
$
|
3,561
|
|
|
$
|
12,934
|
|
|
$
|
11,631
|
|
|
$
|
9,785
|
|
|
$
|
18,195
|
|
|
$
|
56,106
|
|
|
June 29,
2019 |
|
September 29,
2018 |
||||
(In thousands)
|
|
|
|
||||
Reserve for returns
|
$
|
10,390
|
|
|
$
|
5,005
|
|
Product warranty liability
|
3,096
|
|
|
2,450
|
|
||
Other
|
2,660
|
|
|
3,403
|
|
||
Total other current liabilities
|
$
|
16,146
|
|
|
$
|
10,858
|
|
|
June 29, 2019
|
|
June 30, 2018
|
||||
(In thousands)
|
|
|
|
||||
Warranty liability, beginning of period
|
$
|
2,450
|
|
|
$
|
2,437
|
|
Provision for warranties issued during the period
|
9,474
|
|
|
6,865
|
|
||
Settlements of warranty claims during the period
|
(8,828
|
)
|
|
(6,785
|
)
|
||
Warranty liability, end of period
|
$
|
3,096
|
|
|
$
|
2,517
|
|
|
June 29, 2019
|
|
September 29, 2018
|
||||||||||
|
Rate
|
|
Balance
|
|
Rate
|
|
Balance
|
||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
||||||
J.P. Morgan Chase Bank, N.A Secured Term Loan
(1)
|
5.1
|
%
|
|
$
|
40,000
|
|
|
4.8
|
%
|
|
$
|
40,000
|
|
Unamortized debt issuance costs
(2)
|
|
|
(179
|
)
|
|
|
|
(236
|
)
|
||||
Total indebtedness
|
|
|
39,821
|
|
|
|
|
39,764
|
|
||||
Less short-term portion
|
|
|
(11,667
|
)
|
|
|
|
(6,667
|
)
|
||||
Long-term debt
|
|
|
$
|
28,154
|
|
|
|
|
$
|
33,097
|
|
||
|
|
|
|
|
|
|
|
(1)
|
Bears interest at a variable rate equal to an adjusted LIBOR plus
2.25%
and is payable quarterly. Due in October 2021, with quarterly principal payments beginning in July 2019.
|
(2)
|
Debt issuance costs are recorded as a debt discount and recorded as interest expense over the term of the agreement.
|
|
Number of
Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term
|
|
Aggregate Intrinsic Value
|
|||||
|
|
|
|
|
(in years)
|
|
(in thousands)
|
|||||
Outstanding at September 29, 2018
|
48,504,182
|
|
|
$
|
10.33
|
|
|
6.6
|
|
$
|
276,959
|
|
Granted
|
1,714,328
|
|
|
|
|
|
|
|
|
|||
Exercised
|
(5,869,451
|
)
|
|
|
|
|
|
|
|
|||
Forfeited
|
(4,247,115
|
)
|
|
|
|
|
|
|
|
|||
Outstanding at June 29, 2019
|
40,101,944
|
|
|
$
|
11.10
|
|
|
6.4
|
|
$
|
82,902
|
|
At June 29, 2019
|
|
|
|
|
|
|
|
|||||
Options exercisable
|
27,343,825
|
|
|
$
|
9.62
|
|
|
5.4
|
|
$
|
82,475
|
|
Options vested and expected to vest
|
38,174,480
|
|
|
$
|
10.93
|
|
|
6.3
|
|
$
|
82,792
|
|
|
Number of
Units
|
|
Weighted Average Grant Date Fair Value
|
|
Aggregate Intrinsic Value
|
|||||
|
|
|
|
|
(in thousands)
|
|||||
Unvested at September 29, 2018
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Granted
|
7,369,802
|
|
|
|
|
|
||||
Vested
|
(435,978
|
)
|
|
|
|
|
||||
Forfeited
|
(225,899
|
)
|
|
|
|
|
||||
Unvested at June 29, 2019
|
6,707,925
|
|
|
$
|
11.31
|
|
|
$
|
76,068
|
|
At June 29, 2019
|
|
|
|
|
|
|||||
Units expected to vest
|
5,118,685
|
|
|
$
|
11.32
|
|
|
$
|
58,046
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
(In thousands)
|
|
|
|
|
|
|
|
||||||||
Cost of revenue
|
$
|
298
|
|
|
$
|
49
|
|
|
$
|
701
|
|
|
$
|
156
|
|
Research and development
|
4,904
|
|
|
3,651
|
|
|
12,792
|
|
|
10,417
|
|
||||
Sales and marketing
|
3,608
|
|
|
4,391
|
|
|
9,416
|
|
|
12,414
|
|
||||
General and administrative
|
4,598
|
|
|
2,242
|
|
|
10,616
|
|
|
6,410
|
|
||||
Total stock-based compensation expense
|
$
|
13,408
|
|
|
$
|
10,333
|
|
|
$
|
33,525
|
|
|
$
|
29,397
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
(In thousands, except share and per share data)
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common stockholders - basic and diluted
|
$
|
(14,009
|
)
|
|
$
|
(26,988
|
)
|
|
$
|
24,834
|
|
|
$
|
(13,884
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares of common stock—basic
|
105,522,313
|
|
|
60,074,763
|
|
|
102,667,316
|
|
|
59,484,761
|
|
||||
Effect of potentially dilutive stock options
|
—
|
|
|
—
|
|
|
9,115,070
|
|
|
—
|
|
||||
Effect of RSUs
|
—
|
|
|
—
|
|
|
760,612
|
|
|
—
|
|
||||
Weighted-average shares of common stock—diluted
|
105,522,313
|
|
|
60,074,763
|
|
|
112,542,998
|
|
|
59,484,761
|
|
||||
Net income (loss) per share attributable to common stockholders:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to common stockholders - basic
|
$
|
(0.13
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.24
|
|
|
$
|
(0.23
|
)
|
Net income (loss) per share attributable to common stockholders - diluted
|
$
|
(0.13
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
0.22
|
|
|
$
|
(0.23
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||
Convertible preferred stock
|
—
|
|
|
32,482,590
|
|
|
—
|
|
|
32,482,590
|
|
Stock options to purchase common stock
|
40,916,245
|
|
|
48,370,248
|
|
|
34,408,923
|
|
|
48,370,248
|
|
Restricted stock units
|
6,394,726
|
|
|
—
|
|
|
2,532,886
|
|
|
—
|
|
Shares subject to repurchase
|
—
|
|
|
53,892
|
|
|
—
|
|
|
53,892
|
|
Total
|
47,310,971
|
|
|
80,906,730
|
|
|
36,941,809
|
|
|
80,906,730
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
June 29, 2019
|
|
June 30, 2018
|
||||||||
|
|
|
|
|
|
|
|
||||||||
(in thousands, except percentages)
|
|
|
|
|
|
|
|
||||||||
Products sold
|
1,083
|
|
|
887
|
|
|
4,253
|
|
|
3,957
|
|
||||
Adjusted EBITDA
|
$
|
6,797
|
|
|
$
|
(1,541
|
)
|
|
$
|
91,457
|
|
|
$
|
48,968
|
|
Adjusted EBITDA margin
|
2.6
|
%
|
|
(0.7
|
)%
|
|
9.5
|
%
|
|
5.7
|
%
|
•
|
these non-GAAP financial measures exclude depreciation and, although these are non-cash expenses, the assets being depreciated may be replaced in the future;
|
•
|
these non-GAAP financial measures exclude stock-based compensation expense, which has been, and will continue to be, a significant recurring expense for our business and an important part of our compensation strategy;
|
•
|
these non-GAAP financial measures do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us;
|
•
|
these non-GAAP financial measures do not reflect the effect of foreign currency exchange gains or losses, which is included in other income (expense), net;
|
•
|
these non-GAAP financial measures do not reflect income tax payments that reduce cash available to us; and
|
•
|
the expenses and other items that we exclude in our calculation of these non-GAAP financial measures may differ from the expenses and other items, if any, that other companies may exclude from these non-GAAP financial measures when they report their operating results.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29,
2019 |
|
June 30,
2018 |
|
June 29,
2019 |
|
June 30,
2018 |
||||||||
(in thousands, except percentages)
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(14,009
|
)
|
|
$
|
(26,988
|
)
|
|
$
|
24,834
|
|
|
$
|
(13,884
|
)
|
Depreciation
|
8,439
|
|
|
9,760
|
|
|
27,403
|
|
|
28,647
|
|
||||
Stock-based compensation expense
|
13,408
|
|
|
10,333
|
|
|
33,525
|
|
|
29,397
|
|
||||
Interest (income) expense, net
|
(806
|
)
|
|
1,116
|
|
|
(1,019
|
)
|
|
3,367
|
|
||||
Other (income) expense, net
|
(1,068
|
)
|
|
3,744
|
|
|
3,640
|
|
|
315
|
|
||||
Provision for income taxes
|
833
|
|
|
494
|
|
|
3,074
|
|
|
1,126
|
|
||||
Adjusted EBITDA
|
$
|
6,797
|
|
|
$
|
(1,541
|
)
|
|
$
|
91,457
|
|
|
$
|
48,968
|
|
Revenue
|
$
|
260,119
|
|
|
$
|
208,398
|
|
|
$
|
966,663
|
|
|
$
|
864,069
|
|
Adjusted EBITDA margin
|
2.6
|
%
|
|
(0.7
|
)%
|
|
9.5
|
%
|
|
5.7
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29,
2019 |
|
June 30,
2018 |
|
June 29,
2019 |
|
June 30,
2018 |
||||||||
(in thousands)
|
|
||||||||||||||
Revenue
|
$
|
260,119
|
|
|
$
|
208,398
|
|
|
$
|
966,663
|
|
|
$
|
864,069
|
|
Cost of revenue
(1)
|
142,749
|
|
|
112,909
|
|
|
563,591
|
|
|
491,037
|
|
||||
Gross profit
|
117,370
|
|
|
95,489
|
|
|
403,072
|
|
|
373,032
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Research and development
(1)
|
44,355
|
|
|
35,444
|
|
|
121,530
|
|
|
104,209
|
|
||||
Sales and marketing
(1)
|
61,482
|
|
|
60,819
|
|
|
176,705
|
|
|
214,077
|
|
||||
General and administrative
(1)
|
26,583
|
|
|
20,860
|
|
|
74,308
|
|
|
63,822
|
|
||||
Total operating expenses
|
132,420
|
|
|
117,123
|
|
|
372,543
|
|
|
382,108
|
|
||||
Operating income (loss)
|
(15,050
|
)
|
|
(21,634
|
)
|
|
30,529
|
|
|
(9,076
|
)
|
||||
Other income (expense), net
|
|
|
|
|
|
|
|
||||||||
Interest income (expense), net
|
806
|
|
|
(1,116
|
)
|
|
1,019
|
|
|
(3,367
|
)
|
||||
Other income (expense), net
|
1,068
|
|
|
(3,744
|
)
|
|
(3,640
|
)
|
|
(315
|
)
|
||||
Total other income (expense), net
|
1,874
|
|
|
(4,860
|
)
|
|
(2,621
|
)
|
|
(3,682
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before provision for income taxes
|
(13,176
|
)
|
|
(26,494
|
)
|
|
27,908
|
|
|
(12,758
|
)
|
||||
Provision for income taxes
|
833
|
|
|
494
|
|
|
3,074
|
|
|
1,126
|
|
||||
Net income (loss)
|
$
|
(14,009
|
)
|
|
$
|
(26,988
|
)
|
|
$
|
24,834
|
|
|
$
|
(13,884
|
)
|
Adjusted EBITDA
(2)
|
$
|
6,797
|
|
|
$
|
(1,541
|
)
|
|
$
|
91,457
|
|
|
$
|
48,968
|
|
(1)
|
Amounts include stock-based compensation expense as follows:
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
June 29,
2019 |
|
June 30,
2018 |
|
June 29,
2019 |
|
June 30,
2018 |
||||||||
Cost of revenue
|
$
|
298
|
|
|
$
|
49
|
|
|
$
|
701
|
|
|
$
|
156
|
|
Research and development
|
4,904
|
|
|
3,651
|
|
|
12,792
|
|
|
10,417
|
|
||||
Sales and marketing
|
3,608
|
|
|
4,391
|
|
|
9,416
|
|
|
12,414
|
|
||||
General and administrative
|
4,598
|
|
|
2,242
|
|
|
10,616
|
|
|
6,410
|
|
||||
Total stock-based compensation expense
|
$
|
13,408
|
|
|
$
|
10,333
|
|
|
$
|
33,525
|
|
|
$
|
29,397
|
|
(2)
|
Adjusted EBITDA is a financial measure that is not calculated in accordance with U.S. GAAP. See the section titled “Non-GAAP financial measures” above.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
June 29,
2019 |
|
June 30,
2018 |
|
June 29,
2019 |
|
June 30,
2018 |
||||
Revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenue
(1)
|
54.9
|
|
|
54.2
|
|
|
58.3
|
|
|
56.8
|
|
Gross profit
|
45.1
|
|
|
45.8
|
|
|
41.7
|
|
|
43.2
|
|
Operating expenses
|
|
|
|
|
|
|
|
||||
Research and development
(1)
|
17.1
|
|
|
17.0
|
|
|
12.6
|
|
|
12.1
|
|
Sales and marketing
(1)
|
23.6
|
|
|
29.2
|
|
|
18.3
|
|
|
24.8
|
|
General and administrative
(1)
|
10.2
|
|
|
10.0
|
|
|
7.7
|
|
|
7.4
|
|
Total operating expenses
|
50.9
|
|
|
56.2
|
|
|
38.5
|
|
|
44.2
|
|
Operating income (loss)
|
(5.8
|
)
|
|
(10.4
|
)
|
|
3.2
|
|
|
(1.1
|
)
|
Other income (expense), net
|
|
|
|
|
|
|
|
||||
Interest income (expense), net
|
0.3
|
|
|
(0.5
|
)
|
|
0.1
|
|
|
(0.4
|
)
|
Other income (expense), net
|
0.4
|
|
|
(1.8
|
)
|
|
(0.4
|
)
|
|
—
|
|
Total other income (expense), net
|
0.7
|
|
|
(2.3
|
)
|
|
(0.3
|
)
|
|
(0.4
|
)
|
Income (loss) before provision for income taxes
|
(5.1
|
)
|
|
(12.7
|
)
|
|
2.9
|
|
|
(1.5
|
)
|
Provision for income taxes
|
0.3
|
|
|
0.2
|
|
|
0.3
|
|
|
0.1
|
|
Net income (loss)
|
(5.4
|
)
|
|
(13.0
|
)
|
|
2.6
|
|
|
(1.6
|
)
|
Adjusted EBITDA margin
(2)
|
2.6
|
%
|
|
(0.7
|
)%
|
|
9.5
|
%
|
|
5.7
|
%
|
(1)
|
Amounts include stock-based compensation expense as follows:
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
June 29,
2019 |
|
June 30,
2018 |
|
June 29,
2019 |
|
June 30,
2018 |
||||
Cost of revenue
|
0.1
|
%
|
|
—
|
%
|
|
0.1
|
%
|
|
—
|
%
|
Research and development
|
1.9
|
|
|
1.8
|
|
|
1.3
|
|
|
1.2
|
|
Sales and marketing
|
1.4
|
|
|
2.1
|
|
|
1.0
|
|
|
1.4
|
|
General and administrative
|
1.8
|
|
|
1.1
|
|
|
1.1
|
|
|
0.7
|
|
Total stock-based compensation expense
|
5.2
|
%
|
|
5.0
|
%
|
|
3.5
|
%
|
|
3.4
|
%
|
(2)
|
Adjusted EBITDA is a financial measure that is not calculated in accordance with U.S. GAAP. See the section titled “Non-GAAP financial measures” above.
|
|
Three Months Ended
|
|
Change
|
|||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|||||||
(dollars and products sold in thousands)
|
|
|
|
|
|
|
|
|||||||
Americas
|
$
|
145,612
|
|
|
$
|
122,982
|
|
|
$
|
22,630
|
|
|
18.4
|
%
|
EMEA
|
88,151
|
|
|
75,585
|
|
|
12,566
|
|
|
16.6
|
%
|
|||
APAC
|
26,356
|
|
|
9,831
|
|
|
16,525
|
|
|
168.1
|
%
|
|||
Total revenue
|
$
|
260,119
|
|
|
$
|
208,398
|
|
|
$
|
51,721
|
|
|
24.8
|
%
|
|
|
|
|
|
|
|
|
|||||||
Total products sold
|
1,083
|
|
|
887
|
|
|
196
|
|
|
22.1
|
%
|
|
Nine Months Ended
|
|
Change
|
|||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|||||||
(dollars and products sold in thousands)
|
|
|
|
|
|
|
|
|||||||
Americas
|
$
|
520,684
|
|
|
$
|
447,705
|
|
|
$
|
72,979
|
|
|
16.3
|
%
|
EMEA
|
383,537
|
|
|
374,790
|
|
|
8,747
|
|
|
2.3
|
%
|
|||
APAC
|
62,442
|
|
|
41,574
|
|
|
20,868
|
|
|
50.2
|
%
|
|||
Total revenue
|
$
|
966,663
|
|
|
$
|
864,069
|
|
|
$
|
102,594
|
|
|
11.9
|
%
|
|
|
|
|
|
|
|
|
|||||||
Total products sold
|
4,253
|
|
|
3,957
|
|
|
296
|
|
|
7.5
|
%
|
|
Three Months Ended
|
|
Change
|
|||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|||||||
Cost of revenue
|
$
|
142,749
|
|
|
$
|
112,909
|
|
|
$
|
29,840
|
|
|
26.4
|
%
|
Gross profit
|
$
|
117,370
|
|
|
$
|
95,489
|
|
|
$
|
21,881
|
|
|
22.9
|
%
|
Gross margin
|
45.1
|
%
|
|
45.8
|
%
|
|
|
|
|
|
Nine Months Ended
|
|
Change
|
|||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|||||||
Cost of revenue
|
$
|
563,591
|
|
|
$
|
491,037
|
|
|
$
|
72,554
|
|
|
14.8
|
%
|
Gross profit
|
$
|
403,072
|
|
|
$
|
373,032
|
|
|
$
|
30,040
|
|
|
8.1
|
%
|
Gross margin
|
41.7
|
%
|
|
43.2
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|||||||
Research and development
|
$
|
44,355
|
|
|
$
|
35,444
|
|
|
$
|
8,911
|
|
|
25.1
|
%
|
Percentage of revenue
|
17.1
|
%
|
|
17.0
|
%
|
|
|
|
|
|
Nine Months Ended
|
|
Change
|
|||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|||||||
Research and development
|
$
|
121,530
|
|
|
$
|
104,209
|
|
|
$
|
17,321
|
|
|
16.6
|
%
|
Percentage of revenue
|
12.6
|
%
|
|
12.1
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
$
|
61,482
|
|
|
$
|
60,819
|
|
|
$
|
663
|
|
|
1.1
|
%
|
Percentage of revenue
|
23.6
|
%
|
|
29.2
|
%
|
|
|
|
|
|
Nine Months Ended
|
|
Change
|
|||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
$
|
176,705
|
|
|
$
|
214,077
|
|
|
$
|
(37,372
|
)
|
|
(17.5
|
)%
|
Percentage of revenue
|
18.3
|
%
|
|
24.8
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|||||||
General and administrative
|
$
|
26,583
|
|
|
$
|
20,860
|
|
|
$
|
5,723
|
|
|
27.4
|
%
|
Percentage of revenue
|
10.2
|
%
|
|
10.0
|
%
|
|
|
|
|
|
Nine Months Ended
|
|
Change
|
|||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
|||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
|||||||
General and administrative
|
$
|
74,308
|
|
|
$
|
63,822
|
|
|
$
|
10,486
|
|
|
16.4
|
%
|
Percentage of revenue
|
7.7
|
%
|
|
7.4
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
||||||
Interest income (expense), net
|
$
|
806
|
|
|
$
|
(1,116
|
)
|
|
$
|
1,922
|
|
|
*
|
Other income (expense), net
|
$
|
1,068
|
|
|
$
|
(3,744
|
)
|
|
$
|
4,812
|
|
|
*
|
* not meaningful
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
Change
|
||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
||||||
Interest income (expense), net
|
$
|
1,019
|
|
|
$
|
(3,367
|
)
|
|
$
|
4,386
|
|
|
*
|
Other expense, net
|
$
|
(3,640
|
)
|
|
$
|
(315
|
)
|
|
$
|
(3,325
|
)
|
|
*
|
* not meaningful
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
||||||
Provision for income taxes
|
$
|
833
|
|
|
$
|
494
|
|
|
$
|
339
|
|
|
*
|
* not meaningful
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
Change
|
||||||||||
|
June 29, 2019
|
|
June 30, 2018
|
|
$
|
|
%
|
||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
||||||
Provision for income taxes
|
$
|
3,074
|
|
|
$
|
1,126
|
|
|
$
|
1,948
|
|
|
*
|
* not meaningful
|
|
|
|
|
|
|
|
|
As of
|
||||||||||||
|
June 29, 2019
|
|
September 29, 2018
|
||||||||||
|
Rate
|
|
Balance
|
|
Rate
|
|
Balance
|
||||||
(dollars in thousands)
|
|
|
|
|
|
|
|
||||||
Term Loan
(1)
|
5.1
|
%
|
|
$
|
40,000
|
|
|
4.8
|
%
|
|
$
|
40,000
|
|
Unamortized debt issuance costs
(2)
|
|
|
(179
|
)
|
|
|
|
(236
|
)
|
||||
Total indebtedness
|
|
|
39,821
|
|
|
|
|
39,764
|
|
||||
Less short-term portion
|
|
|
(11,667
|
)
|
|
|
|
(6,667
|
)
|
||||
Long-term debt
|
|
|
$
|
28,154
|
|
|
|
|
$
|
33,097
|
|
(1)
|
Bears interest at a variable rate equal to an adjusted LIBOR plus
2.25%
and is payable quarterly. Due in October 2021, with quarterly principal payments beginning in July 2019.
|
(2)
|
Debt issuance costs are recorded as a debt discount and recorded as interest expense over the term of the agreement.
|
|
Nine Months Ended
|
||||||
|
June 29, 2019
|
|
June 30, 2018
|
||||
(In thousands)
|
|
|
|
||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
110,936
|
|
|
$
|
15,792
|
|
Investing activities
|
(14,092
|
)
|
|
(25,927
|
)
|
||
Financing activities
|
20,617
|
|
|
2,683
|
|
||
Effect of exchange rate changes
|
(103
|
)
|
|
1,289
|
|
||
Net change in cash, cash equivalents and restricted cash
|
$
|
117,358
|
|
|
$
|
(6,163
|
)
|
•
|
research and development to continue to introduce innovative new products, enhance existing products and improve our customers’ listening experience;
|
•
|
sales and marketing to expand our global brand awareness, promote new products, increase our customer base and expand sales within our existing customer base; and
|
•
|
legal, accounting, information technology and other administrative expenses to sustain our operations as a public company.
|
•
|
fluctuations in demand for our products, including seasonal variations;
|
•
|
the timing and success of new product introductions, which products initially tend to have a lower gross margin;
|
•
|
the timing and success of new product introductions by our competitors;
|
•
|
pricing pressure as a result of competition or otherwise;
|
•
|
shifts in product, geographic or channel mix;
|
•
|
the imposition of tariffs and other trade barriers, and the effects of retaliatory trade measures;
|
•
|
delays or disruptions in our supply, manufacturing or distribution chain;
|
•
|
fluctuations in costs and availability of raw materials and components, and in other manufacturing costs;
|
•
|
fluctuations in levels of channel inventory;
|
•
|
amount and timing of sales and marketing and other operating expenses related to maintenance and expansion of our business;
|
•
|
negative publicity about our products;
|
•
|
adverse litigation judgments, settlements or other litigation-related costs, especially from litigation involving alleged patent infringement or defense of our patents;
|
•
|
fluctuations in foreign exchange rates;
|
•
|
changes in tax rates or adverse changes in tax laws that expose us to additional income tax liabilities;
|
•
|
natural disasters, geopolitical unrest, war, terrorism and other catastrophes outside of our control; and
|
•
|
general economic conditions in domestic or international markets.
|
•
|
fluctuations in currency exchange rates;
|
•
|
political, social and/or economic instability;
|
•
|
risks related to governmental regulations in foreign jurisdictions and unexpected changes in regulatory requirements and enforcement;
|
•
|
higher levels of credit risk and payment fraud;
|
•
|
burdens of complying with a variety of foreign laws;
|
•
|
the cost of developing connected products for countries where Wi-Fi technology has been passed over in favor of more advanced cellular data networks;
|
•
|
tariffs, trade barriers and duties;
|
•
|
reduced protection for intellectual property rights in some countries;
|
•
|
difficulties in staffing and managing global operations and the increased travel, infrastructure and legal compliance costs associated with having multiple international locations;
|
•
|
compliance with statutory equity requirements;
|
•
|
potential negative consequences from changes in or interpretations of U.S. and foreign tax laws;
|
•
|
protectionist laws and business practices that favor local businesses in some countries;
|
•
|
imposition of currency exchange controls;
|
•
|
greater fluctuations in sales to customers in developing countries, including longer payment cycles and greater difficulty collecting accounts receivable; and
|
•
|
delays from customs brokers or government agencies.
|
•
|
hiring of experienced additional accounting and financial reporting personnel; and
|
•
|
creation of additional controls including those designed to strengthen our review processes around financial statement disclosures and accounting for non-routine, unusual or complex transactions.
|
•
|
overall performance of the equity markets and the economy as a whole;
|
•
|
changes in the financial projections we may provide to the public or our failure to meet these projections;
|
•
|
actual or anticipated changes in our growth rate relative to that of our competitors;
|
•
|
announcements of new products, or of acquisitions, strategic partnerships, joint ventures or capital- raising activities or commitments, by us or by our competitors;
|
•
|
additions or departures of key personnel;
|
•
|
failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our failure to meet these estimates or the expectations of investors;
|
•
|
rumors and market speculation involving us or other companies in our industry; and
|
•
|
sales of shares of our common stock by us or our stockholders.
|
•
|
a classified Board so that not all members of the Board are elected at one time;
|
•
|
the ability of the Board to determine the number of directors and to fill any vacancies and newly created directorships;
|
•
|
a requirement that our directors may only be removed for cause;
|
•
|
a prohibition on cumulative voting for directors;
|
•
|
the requirement of a super-majority to amend some provisions in our restated certificate of incorporation and restated bylaws;
|
•
|
authorization of the issuance of “blank check” preferred stock that the Board could use to implement a stockholder rights plan;
|
•
|
an inability of our stockholders to call special meetings of stockholders; and
|
•
|
a prohibition on stockholder actions by written consent, thereby requiring that all stockholder actions be taken at a meeting of our stockholders.
|
Exhibit
number
|
|
|
|
Incorporated by reference
|
|
Filed or furnished
herewith
|
||||||
Exhibit title
|
|
Form
|
|
File no.
|
|
Exhibit
|
|
Filing date
|
|
|||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
Date: August 8, 2019
|
By:
|
/s/ Patrick Spence
|
|
|
Patrick Spence
|
|
|
Chief Executive Officer and Director
|
|
|
(Principal Executive Officer)
|
Date: August 8, 2019
|
By:
|
/s/ Brittany Bagley
|
|
|
Brittany Bagley
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Sonos, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date: August 8, 2019
|
/s/ Patrick Spence
|
|
Patrick Spence
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Sonos, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date: August 8, 2019
|
/s/ Brittany Bagley
|
|
Brittany Bagley
|
|
Chief Financial Officer
(Principal Financial Officer
and Principal Accounting Officer)
|
Date: August 8, 2019
|
|
By:
|
|
/s/ Patrick Spence
|
|
|
|
|
Patrick Spence
|
|
|
|
|
Chief Executive Officer
(Principal Executive Officer)
|
Date: August 8, 2019
|
|
By:
|
|
/s/ Brittany Bagley
|
|
|
|
|
Brittany Bagley
|
|
|
|
|
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
|