Latest News

Introduces Fiscal 2022 Outlook; Ahead of Schedule Reaching Fiscal 2024 Targets

SANTA BARBARA, Calif.--(BUSINESS WIRE)-- Sonos, Inc. (Nasdaq: SONO) today reported fourth quarter and fiscal 2021 results.

Fiscal 2021 Financial Highlights (unaudited)

• Revenue increased 29% to $1.717 billion; excluding the impact of the 53rd week in fiscal 2020, revenue increased approximately 32%
• Gross margin increased 410 basis points to 47.2%; excluding the effect of tariff duties and refunds, gross margin increased 130 basis points to a record of 46.9%
• GAAP net income increased to $158.6 million from a net loss of ($20.1) million last year; non-GAAP net income excluding stock-based compensation, restructuring, and legal and transaction-related fees increased to $248.3 million from $79.2 million last year
• GAAP diluted earnings per share (EPS) increased to $1.13 from a loss per share of ($0.18) last year; non-GAAP diluted earnings per share (EPS) excluding stock-based compensation, restructuring, and legal and transaction related fees increased to $1.77 from $0.67 last year
• Adjusted EBITDA increased 157% to $278.6 million
• Adjusted EBITDA margin increased 800 basis points to 16.2%
• Cash flows from operating activities increased to $253.2 million compared to $162.0 million last year
• Free cash flow increased to $207.7 million compared to $129.0 million last year

Fourth Quarter 2021 Financial Highlights (unaudited)

• Revenue increased 6% year-over-year to $359.5 million; excluding the impact of the 14th week last year, revenue increased approximately 14% year-over-year
• Gross margin of 46.4% compared to 47.5% last year; excluding the effect of tariff duties and refunds, gross margin was 45.7% compared to 48.3% last year
• GAAP net loss of ($8.7) million compared to net income of $18.4 million last year; non-GAAP net income excluding stock-based compensation, restructuring and legal and transaction related fees of $11.8 million compared to $40.7 million last year
• GAAP diluted loss per share of ($0.07) compared to $0.15 last year; non-GAAP diluted earnings per share (EPS) excluding stock-based compensation, restructuring, and legal and transaction related fees of $0.08 compared to $0.33 last year
• Adjusted EBITDA of $17.1 million compared to $46.4 million last year
• Adjusted EBITDA margin was 4.8% compared to 13.7% last year

Fiscal 2022 Outlook

• Revenue in the range of $1.925 billion to $2.0 billion, representing growth in the range of 12% to 16% from fiscal 2021
• Gross margin in the range of 46% to 47%. Our fiscal 2022 gross margin outlook includes minimal net tariff impact
• Adjusted EBITDA in the range of $280 million to $325 million, representing growth in the range of 1% to 17%
• Adjusted EBITDA margin in the range of 14.5% to 16.2%

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 $150 million
• Under its prior repurchase programs, the company completed $100 million in stock repurchases, representing 5.2 million shares at an average price of $19.30 per share, enabling the company to return capital to shareholders and offset dilution from compensation plans.

Sonos CEO Patrick Spence commented, “We are thrilled to report another record year at Sonos. Our fiscal 2021 results are an illustration of just how much our products have appealed to customers and how powerful and profitable our model is as we execute and scale. Demand for our products remains incredibly robust and, despite continued supply constraints, we delivered a record $1.717 billion in revenue, up nearly 30% from the prior year. We achieved record adjusted EBITDA of $278.6 million, representing a record adjusted EBITDA margin of 16.2%, up 800 basis points from the prior year.”

“As our customers recognize, Sonos products operate seamlessly together, with more products improving the experience. We consistently see our existing customers adding more products to their systems, and with every new household that we add, that flywheel begins. Total households increased 15% to a record 12.6 million in fiscal 2021, while our existing customers once again showed strong repurchase habits, accounting for a record 46% of total product registrations. Total products per household increased to 3.0, underscoring the power of our model and we are poised to drive further increases in customer lifetime value as we continue to innovate and introduce new products and services,” continued Mr. Spence.

“Demand for our products remains stronger than ever, and we are entering fiscal 2022 with a significant backlog due to the continued industry-wide supply constraints. Despite these supply constraints, we expect to deliver another strong year in fiscal 2022, including 16% revenue growth and 17% adjusted EBITDA growth at the high end of our outlook. The powerful momentum we are experiencing in our business puts us ahead of schedule for reaching the fiscal 2024 financial targets introduced at our investor event last March. As we look forward, we are confident in our ability to deliver an approximately 13% revenue CAGR, 45% to 47% gross margin, and 15% to 18% adjusted EBITDA margin through fiscal 2024. We have an exciting product roadmap ahead, are extremely well positioned for the long-term, and expect to deliver significant free cash flow and increased shareholder value over time as we continue on our quest to be the world’s leading sound experience company,” Mr. Spence concluded.

Fiscal 2021 Company Highlights (unaudited)

Key Metrics:

• Total households increased 15% to 12.6 million in fiscal 2021
• Existing households accounted for 46% of new product registrations in fiscal 2021
• Average number of registered products per household of 3.0 in fiscal 2021 vs 2.9 last year
• Listening hours increased 19% year-over-year
• Direct-to-consumer revenue increased nearly 47% and represented 24% of total revenue

Strategic Initiatives:

• Expansion of our Offerings:
  • Introduced Sonos Radio HD in November 2020 - an ad-free, high-definition streaming tier of Sonos Radio featuring even more exclusive content directly in the Sonos app, now in lossless, CD-quality audio.
  • Launched Roam in April 2021 ($179 MSRP) - the ultra-portable smart speaker built to deliver great sound at home and on any adventure.
  • Announced first-everautomotive audio partnership with Audi in April 2021- featuring a Sonos-tuned premium sound experience in the Audi Q4 e-tron and future models including the A1, Q2 and Q3.
  • Introduced new partner products with IKEA in June and September 2021 - including the SYMFONISK picture frame and updated lamp.

• Expansion of our Brand:
  • Named one of Fast Company’s Brands that Matter in 2021 - The list captures brands who are inspiring all of us whether it be leading in pop culture or responding meaningfully to current events
  • Entered into first-ever sports team partnership with Liverpool Football Club - a multi-year partnership naming Sonos the Official Sound Partner of Liverpool FC and creating immersive sound experiences within Anfield stadium
  • Teamed up with ESPN as an Official Sponsor of ESPN College Football
  • Announced multi-faceted partnership with the North Face and Sonos Radio in celebration of the launch of Roam
  • Launched new, exclusive programming on Sonos Radio, in partnership with artists such as Brian Eno, Erkyah Badu, M.I.A and more, and grew Radio HD with geo expansion to five new countries - Austria, Canada, France, Germany and The Netherlands. Listening hours doubled during the past year.

• Delivering Operational Excellence and Other Highlights
  • Continued strong execution, delivering record fiscal 2021 revenue, gross margin, adjusted EBITDA and free cash flow in a challenging supply chain and logistics environment.
  • Included in Inc. Magazine first ever list of the 250 Best-Led Companies - coming in at #13. The list highlights America's thriving midsize companies that are the unsung heroes of the US economy and the standout CEOs that are setting the gold standard for leadership.
  • Published our annual Listen Better report, highlighting the work we have done to improve our efforts as a responsible company. In 2021, we developed our first climate action plan, which we will be sharing alongside our annual Listen Better report in December.

Supplemental Earnings Presentation

The Company has posted a supplemental earnings presentation accompanying its fourth quarter and fiscal 2021 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 2021 results on November 17, 2021 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 1804222. 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.

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, revenue excluding the 53rd week, revenue excluding the 14th week, free cash flow, gross margin excluding the effect of tariffs, net income (loss) excluding stock-based compensation, restructuring, and legal and transaction related fees, and diluted earnings per share (EPS) excluding stock-based compensation, restructuring, 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 (loss) 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 assets. We calculate gross margin excluding the effect of tariff duties and refunds as gross profit, less the effect of tariffs imposed on goods imported to the U.S. from China and any tariffs refunds subject to a tariff refund claim approved by U.S. Customs and Border Protection, divided by revenue. We calculate non-GAAP net income (loss) excluding stock-based compensation, restructuring and legal and transaction related fees as net income (loss) less stock-based compensation, restructuring fees and legal and transaction related fees. We calculate non-GAAP diluted earnings per share (EPS) excluding stock-based compensation, restructuring, and legal and transaction related fees as net income (loss) less stock-based compensation, restructuring costs 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 ended October 1, 2022, our fiscal 2024 targets, 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, our direct-to-consumer efforts, our market share, and other factors affecting variability in our financial results. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors, including, but not limited to the duration and impact of the COVID-19 pandemic and related mitigation efforts on our industry and our supply chain; supply chain challenges, including shipping and logistics challenges and significant limits on component supplies; changes in general economic or market conditions that could affect consumer income and overall consumer spending; our ability to successfully introduce new products and services and maintain or expand the success of our existing products; the success of our efforts to expand our direct-to-consumer channel; the success of our financial, growth and business strategies; our ability to meet product demand and manage any product availability delays; and the other risk factors set forth under the caption “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended July 3, 2021 and our other filings filed with the Securities and Exchange Commission (the “SEC”), copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this press release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events. Sonos and Sonos product names are trademarks or registered trademarks of Sonos, Inc. All other product names and services may be trademarks or service marks of their respective owners.

About Sonos

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20211117006276/en/

Investor Contact
Cammeron McLaughlin
[email protected]

Press Contact
Tom Lodge
[email protected]

Source: Sonos