Sonos, Inc. (NASDAQ: SONO) announced that it is hosting a virtual investor event today at 4:00 pm EST (1:00 pm PST) to provide a comprehensive update on its business and financial outlook for fiscal year 2024. The event is accessible at the Sonos Investor Relations website.
The company is also introducing Sonos Roam™, the ultra-portable smart speaker built to deliver great sound at home and on any adventure. fully connected to your Sonos system on WiFi at home and automatically switching to Bluetooth when you’re on the go, Roam’s powerful, adaptable sound defies expectations for a speaker of its size. Roam is available starting April 20 for $169 MSRP and customers can pre-order today on sonos.com. For full product details visit the Sonos Newsroom.
- Sonos is just getting started. The company believes it’s just scratching the surface of its long-term opportunity. Sonos was in 11 million homes at the end of fiscal year 2020, representing only approximately 9% of the 116 million affluent homes in its existing markets1. On the revenue side, Sonos accounted for approximately 7% of the total spend in the $18 billion premium home audio market in 20202, and expects to expand into the broader $89 billion global audio opportunity over the long-term.
- Sonos has a unique model that serves customers and enables it to continue building a sustainable, profitable business. Sonos believes the power of its business model is that customers can start with one product and expand to more over time, and its customers have proven they do just that. The company has increased its efficiency in attracting new customers, and existing and new customers continue to add additional Sonos products over time as they build out their system. Customers who purchased products in 2005, the year Sonos shipped its first product, have continued to return through 2020 to add additional ones, illustrating the power and longevity of the company’s model.
Sonos plans to seize this opportunity by focusing on three key strategic initiatives.
- Expanding its Brand
- Expanding its Offerings
- Driving Operational Excellence.
Fiscal 2024 Targets
Today, Sonos is sharing its financial targets for fiscal year 2024 which are ahead of long-term targets provided in 2018 in conjunction with its initial public offering. Despite the uncertainty that continues to exist in the broader macro environment, Sonos believes it can deliver the following financial targets in fiscal year 2024:
- Revenue of $2.25 billion, representing a 13% CAGR based on the midpoint of its fiscal 2021 guidance and ahead of its prior long-term target of 10% CAGR.
- Gross margin in the range of 45% to 47%, despite product and channel mix shifts the company expects to achieve this range in each fiscal year. This gross margin range is ahead of the company’s prior long-term gross margin target of 42% to 44%.
- Adjusted EBITDA margin in the range of 15% to 18%, driven by growth and leverage of existing operating expense, and ahead of the company’s prior long-term adjusted EBITDA margin target of 13% to 15%.
Additional Event Details
In addition to CEO Patrick Spence, Sonos investor event speakers will include:
- Brittany Bagley, Chief Financial Officer
- Eddie Lazarus, Chief Legal Officer
- Ted Dworkin, SVP, Product Management & Customer Experience
- Pete Pedersen, VP, Marketing
The event will begin at 4:00 pm EST and the video webcast and question and answer session will be available online at the Sonos Investor Relations website. A replay and the slide presentation will also be available at the Sonos Investor Relations website following the conclusion of the event.
1 “Affluent homes” comprise households with disposable income as defined by the OECD of $75,000+ USD. Existing markets Core Markets include the United States, Canada, Australia, United Kingdom, Germany, Netherlands, Sweden, France, Switzerland, Norway, Belgium, Italy, Austria, Spain, Ireland, Finland and Poland. Source: Euromonitor.
2 “Premium” defined as $100+ wireless speakers, $200+ soundbars, $300+ Hi-Fi systems, $250+ in-wall/in-ceiling speakers, $250+ bookshelf speakers (pairs), and all AV receivers, Floor standing speakers, home theater speakers and home theater in a box products and Hi-Fi separates. Source: Futuresource.
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 margin. 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 use non-GAAP financial measures to evaluate our operating performance and trends and make planning decisions. We believe that 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 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. This non-GAAP financial measure is not based on any standardized methodology prescribed by U.S. GAAP and is not necessarily comparable to similarly titled measures presented by other companies. 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 certain 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 September 28, 2024, our long-term focus, financial, growth and business strategies and opportunities, growth metrics and targets, our business model, new products and services, our expectations about our potential and existing markets and customers 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; 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 financial, growth and business strategies;; and the other risk factors set forth under the caption “Risk Factors” in our Annual Report on Form 10-Q for the quarter ended January 2, 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.
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.