Cover Page
Cover Page - shares | 6 Months Ended | |
Apr. 02, 2022 | Apr. 30, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 2, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38603 | |
Entity Registrant Name | SONOS, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 03-0479476 | |
Entity Address, Address Line One | 614 Chapala Street | |
Entity Address, City or Town | Santa Barbara | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 93101 | |
City Area Code | 805 | |
Local Phone Number | 965-300 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | SONO | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 127,888,720 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001314727 | |
Current Fiscal Year End Date | --01-01 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Apr. 02, 2022 | Oct. 02, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 606,744 | $ 640,101 |
Accounts receivable, net of allowances | 111,388 | 100,779 |
Inventories | 264,405 | 185,130 |
Prepaids and other current assets | 28,175 | 31,504 |
Total current assets | 1,010,712 | 957,514 |
Property and equipment, net | 71,973 | 71,341 |
Operating lease right-of-use assets | 30,660 | 33,841 |
Goodwill | 37,726 | 15,545 |
Intangible assets, net | 28,888 | 24,450 |
Deferred tax assets | 9,871 | 10,028 |
Other noncurrent assets | 36,401 | 26,085 |
Total assets | 1,226,231 | 1,138,804 |
Current liabilities: | ||
Accounts payable | 271,005 | 214,996 |
Accrued expenses | 100,344 | 108,029 |
Accrued compensation | 32,365 | 77,695 |
Deferred revenue, current | 18,438 | 35,866 |
Other current liabilities | 41,584 | 39,544 |
Total current liabilities | 463,736 | 476,130 |
Operating lease liabilities, noncurrent | 29,342 | 33,960 |
Deferred revenue, noncurrent | 58,196 | 53,632 |
Deferred tax liabilities | 2,394 | 2,394 |
Other noncurrent liabilities | 879 | 3,646 |
Total liabilities | 554,547 | 569,762 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value | 130 | 129 |
Treasury stock | (36,831) | (50,276) |
Additional paid-in capital | 647,871 | 690,462 |
Retained earnings (accumulated deficit) | 62,150 | (69,897) |
Accumulated other comprehensive loss | (1,636) | (1,376) |
Total stockholders’ equity | 671,684 | 569,042 |
Total liabilities and stockholders’ equity | $ 1,226,231 | $ 1,138,804 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Apr. 02, 2022 | Oct. 02, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2022 | Apr. 03, 2021 | Apr. 02, 2022 | Apr. 03, 2021 | |
Income Statement [Abstract] | ||||
Revenue | $ 399,781 | $ 332,949 | $ 1,064,262 | $ 978,532 |
Cost of revenue | 220,747 | 167,173 | 567,843 | 513,331 |
Gross profit | 179,034 | 165,776 | 496,419 | 465,201 |
Operating expenses | ||||
Research and development | 64,947 | 56,370 | 126,277 | 108,717 |
Sales and marketing | 59,955 | 57,205 | 143,691 | 131,658 |
General and administrative | 44,090 | 39,806 | 83,816 | 75,047 |
Total operating expenses | 168,992 | 153,381 | 353,784 | 315,422 |
Operating income | 10,042 | 12,395 | 142,635 | 149,779 |
Other income (expense), net | ||||
Interest income | 123 | 44 | 156 | 80 |
Interest expense | (90) | (182) | (187) | (448) |
Other income (expense), net | (2,281) | (1,578) | (3,683) | 2,680 |
Total other income (expense), net | (2,248) | (1,716) | (3,714) | 2,312 |
Income before provision for (benefit from) income taxes | 7,794 | 10,679 | 138,921 | 152,091 |
Provision for (benefit from) income taxes | (772) | (6,542) | 6,874 | 2,578 |
Net income | 8,566 | 17,221 | 132,047 | 149,513 |
Net income attributable to common stockholders: | ||||
Basic and diluted | $ 8,566 | $ 17,221 | $ 132,047 | $ 149,513 |
Basic (in USD per share) | $ 0.07 | $ 0.14 | $ 1.03 | $ 1.26 |
Diluted (in USD per share) | $ 0.06 | $ 0.12 | $ 0.94 | $ 1.09 |
Weighted-average shares used in computing net income per share attributable to common stockholders: | ||||
Basic (in shares) | 128,112,234 | 121,880,615 | 127,887,530 | 118,745,569 |
Diluted (in shares) | 139,642,570 | 143,055,546 | 140,982,509 | 136,849,846 |
Total comprehensive income | ||||
Net income | $ 8,566 | $ 17,221 | $ 132,047 | $ 149,513 |
Change in foreign currency translation adjustment | 100 | 199 | (260) | 1,046 |
Comprehensive income | $ 8,666 | $ 17,420 | $ 131,787 | $ 150,559 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance, beginning of period (in shares) at Oct. 03, 2020 | 113,915,233 | (1,571,138) | ||||
Balance, beginning of period at Oct. 03, 2020 | $ 297,839 | $ 114 | $ 548,993 | $ (20,886) | $ (228,492) | $ (1,890) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock pursuant to equity incentive plans (in shares) | 7,075,338 | |||||
Issuance of common stock pursuant to equity incentive plans | 69,505 | $ 7 | 69,498 | |||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") (in shares) | (307,980) | |||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") | (5,118) | $ (5,118) | ||||
Stock-based compensation expense | 14,844 | 14,844 | ||||
Net income | 132,292 | 132,292 | ||||
Change in foreign currency translation adjustment | 847 | 847 | ||||
Balance, end of period (in shares) at Jan. 02, 2021 | 120,990,571 | 1,879,118 | ||||
Balance, ending of period at Jan. 02, 2021 | 510,209 | $ 121 | 633,335 | $ (26,004) | (96,200) | (1,043) |
Balance, beginning of period (in shares) at Oct. 03, 2020 | 113,915,233 | (1,571,138) | ||||
Balance, beginning of period at Oct. 03, 2020 | 297,839 | $ 114 | 548,993 | $ (20,886) | (228,492) | (1,890) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 149,513 | |||||
Change in foreign currency translation adjustment | 1,046 | |||||
Balance, end of period (in shares) at Apr. 03, 2021 | 125,716,622 | (1,268,563) | ||||
Balance, ending of period at Apr. 03, 2021 | 579,268 | $ 126 | 684,988 | $ (26,023) | (78,979) | (844) |
Balance, beginning of period (in shares) at Jan. 02, 2021 | 120,990,571 | 1,879,118 | ||||
Balance, beginning of period at Jan. 02, 2021 | 510,209 | $ 121 | 633,335 | $ (26,004) | (96,200) | (1,043) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock pursuant to equity incentive plans (in shares) | 5,743,359 | |||||
Issuance of common stock pursuant to equity incentive plans | 49,661 | $ 6 | 49,655 | |||
Retirement of treasury stock (in shares) | 1,017,308 | 1,017,308 | ||||
Retirement of treasury stock | $ (1) | (14,365) | $ 14,366 | |||
Purchase of common stock (in shares) | (19,547) | |||||
Repurchase of common stock | (682) | $ (682) | ||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") (in shares) | (387,206) | |||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") | (13,703) | $ (13,703) | ||||
Stock-based compensation expense | 16,363 | 16,363 | ||||
Net income | 17,221 | 17,221 | ||||
Change in foreign currency translation adjustment | 199 | 0 | 199 | |||
Balance, end of period (in shares) at Apr. 03, 2021 | 125,716,622 | (1,268,563) | ||||
Balance, ending of period at Apr. 03, 2021 | 579,268 | $ 126 | 684,988 | $ (26,023) | (78,979) | (844) |
Balance, beginning of period (in shares) at Oct. 02, 2021 | 128,857,085,000 | (1,871,812) | ||||
Balance, beginning of period at Oct. 02, 2021 | 569,042 | $ 129 | 690,462 | $ (50,276) | (69,897) | (1,376) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock pursuant to equity incentive plans (in shares) | 2,030,373 | |||||
Issuance of common stock pursuant to equity incentive plans | 13,232 | $ 2 | 13,230 | |||
Retirement of treasury stock (in shares) | (1,010,286) | 1,010,286 | ||||
Retirement of treasury stock | $ (1) | (38,647) | $ (38,648) | |||
Purchase of common stock (in shares) | (1,032,249) | |||||
Repurchase of common stock | (31,365) | $ (31,365) | ||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") (in shares) | (344,198) | |||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") | (11,882) | $ (11,882) | ||||
Stock-based compensation expense | 17,459 | 17,459 | ||||
Net income | 123,481 | 23,481 | ||||
Change in foreign currency translation adjustment | (360) | (360) | ||||
Balance, end of period (in shares) at Jan. 01, 2022 | 129,877,172 | (2,237,973) | ||||
Balance, ending of period at Jan. 01, 2022 | 679,607 | $ 130 | 682,504 | $ (54,875) | 53,584 | (1,736) |
Balance, beginning of period (in shares) at Oct. 02, 2021 | 128,857,085,000 | (1,871,812) | ||||
Balance, beginning of period at Oct. 02, 2021 | $ 569,042 | $ 129 | 690,462 | $ (50,276) | (69,897) | (1,376) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock pursuant to equity incentive plans (in shares) | 2,526,447 | |||||
Retirement of treasury stock (in shares) | (3,428,470) | |||||
Purchase of common stock (in shares) | (2,644,170) | |||||
Net income | $ 132,047 | |||||
Change in foreign currency translation adjustment | (260) | |||||
Balance, end of period (in shares) at Apr. 02, 2022 | 129,959,957 | (1,808,635) | ||||
Balance, ending of period at Apr. 02, 2022 | 671,684 | $ 130 | 647,871 | $ (36,831) | 62,150 | (1,636) |
Balance, beginning of period (in shares) at Jan. 01, 2022 | 129,877,172 | (2,237,973) | ||||
Balance, beginning of period at Jan. 01, 2022 | 679,607 | $ 130 | 682,504 | $ (54,875) | 53,584 | (1,736) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock pursuant to equity incentive plans (in shares) | 2,500,969 | |||||
Issuance of common stock pursuant to equity incentive plans | 16,021 | $ 2 | 16,019 | |||
Retirement of treasury stock (in shares) | (2,418,184) | (2,418,184) | ||||
Retirement of treasury stock | $ (2) | (71,877) | $ 71,879 | |||
Purchase of common stock (in shares) | 1,611,921 | |||||
Repurchase of common stock | (43,115) | $ (43,115) | ||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") (in shares) | (376,925) | |||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") | (10,720) | $ (10,720) | ||||
Stock-based compensation expense | 21,225 | 21,225 | ||||
Net income | 8,566 | 8,566 | ||||
Change in foreign currency translation adjustment | 100 | 100 | ||||
Balance, end of period (in shares) at Apr. 02, 2022 | 129,959,957 | (1,808,635) | ||||
Balance, ending of period at Apr. 02, 2022 | $ 671,684 | $ 130 | $ 647,871 | $ (36,831) | $ 62,150 | $ (1,636) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Cash flows from operating activities | ||
Net income | $ 132,047 | $ 149,513 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 18,792 | 16,725 |
Stock-based compensation expense | 38,684 | 31,207 |
Other | 4,357 | 344 |
Deferred income taxes | (129) | (146) |
Foreign currency transaction (gain) loss | 2,267 | (1,047) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (12,786) | (13,260) |
Inventories | (86,153) | 39,631 |
Other assets | (6,082) | (21,982) |
Accounts payable and accrued expenses | 51,643 | (36,485) |
Accrued compensation | (45,084) | 2,087 |
Deferred revenue | (11,834) | 8,374 |
Other liabilities | (3,348) | 992 |
Net cash provided by (used in) operating activities | 82,374 | 175,953 |
Net cash provided by (used in) investing activities | ||
Purchases of property and equipment, intangible and other assets | (15,665) | (19,927) |
Cash paid for acquisitions, net of acquired cash | (27,101) | 0 |
Net cash used in investing activities | (42,766) | (19,927) |
Cash flows from financing activities | ||
Payments for debt issuance costs | (929) | 0 |
Payments of borrowings | 0 | (25,000) |
Payments for repurchase of common stock | (74,482) | (682) |
Proceeds from exercise of common stock options | 29,254 | 119,166 |
Payments for repurchase of common stock related to shares withheld for tax in connection with vesting of RSUs | (22,601) | (18,821) |
Net cash provided by (used in) financing activities | (68,758) | 74,663 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (4,207) | 1,139 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (33,357) | 231,828 |
Cash, cash equivalents and restricted cash | ||
Beginning of period | 640,101 | 407,291 |
End of period | 606,744 | 639,119 |
Supplemental disclosure | ||
Cash paid for interest | 85 | 357 |
Cash paid for taxes, net of refunds | 8,916 | 3,255 |
Cash paid for amounts included in the measurement of lease liabilities | 7,800 | 11,683 |
Supplemental disclosure of non-cash investing and financing activities | ||
Purchases of property and equipment in accounts payable and accrued expenses | 7,869 | 8,910 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 2,245 | $ 1,622 |
Business Overview and Basis of
Business Overview and Basis of Presentation | 6 Months Ended |
Apr. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview and Basis of Presentation | 1. Business Overview and Basis of Presentation Description of business Sonos, Inc. and its wholly owned subsidiaries (collectively, “Sonos,” the “Company,” “we,” “us” or “our”) designs, develops, manufactures, and sells audio products and services. The Sonos sound system provides customers with an immersive listening experience created by the design of its speakers and components, a proprietary software platform, and the ability to stream content from a variety of sources over the customer’s wireless network or over Bluetooth. The Company’s products are sold through third-party physical retailers, including custom installers of home audio systems, select e-commerce retailers, and its website, sonos.com. The Company’s products are distributed in over 50 countries through its wholly owned subsidiaries: Sonos Europe B.V. in the Netherlands, Beijing Sonos Technology Co. Ltd. in China, Sonos Japan GK in Japan, and Sonos Australia Pty Ltd. in Australia. Basis of presentation and preparation The accompanying condensed consolidated financial statements are unaudited. The condensed consolidated balance sheet as of October 2, 2021, has been derived from the audited consolidated financial statements of the Company. The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for annual financial statements. They should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2021, (the “Annual Report”), filed with the SEC on November 22, 2021. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations, and its cash flows for the interim periods presented. The results of operations for the three and six months ended April 2, 2022, are not necessarily indicative of the results to be expected for the full fiscal year or any other period. The Company operates on a 52- week or 53- week fiscal year ending on the Saturday nearest September 30 each year. The Company’s fiscal year is divided into four quarters of 13 weeks, each beginning on a Sunday and containing two 4-week periods followed by a 5-week period. An additional week is included in the fourth fiscal quarter approximately every five years to realign fiscal quarters with calendar quarters. This last occurred in the fourth quarter of the Company’s fiscal year ended October 3, 2020, and will reoccur in the fiscal year ending October 3, 2026. The six months ended April 2, 2022, and April 3, 2021 , spanned 26 weeks each. As used in this Quarterly Report on Form 10-Q, “fiscal 2022” refers to the fiscal year ending October 1, 2022, “fiscal 2021” refers to the fiscal year ended October 2, 2021, and "fiscal 2020” refers to the fiscal year ended October 3, 2020. Use of estimates and judgments The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates and judgments compared to historical experience and expected trends. In March 2020, the outbreak of the novel coronavirus (COVID-19) was declared a pandemic. While the nature of the situation is dynamic, the Company has considered the impact when developing its estimates and assumptions noted above. Actual results and outcomes may differ from management's estimates and assumptions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Apr. 02, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies There have been no changes in the Company’s significant accounting policies, recently adopted accounting pronouncements or recent accounting pronouncements pending adoption from those disclosed in the Annual Report, except as noted below. Recently adopted accounting pronouncements In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification Topic 740 ("ASC 740") as well as by improving consistent application of the topic by clarifying and amending existing guidance. The Company adopted this standard in the first quarter of fiscal 2022. The adoption did not have a material impact on the Company's condensed consolidated financial statements. Recent accounting pronouncements pending adoption In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This update requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. This standard is effective for the Company in the first quarter of fiscal 2024, with early adoption permitted. The Company is currently evaluating the pronouncement and does not expect it to have a material impact on the Company's consolidated financial statements or disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting, and then issued a subsequent amendment to the initial guidance under ASU No. 2021-01 (collectively Topic 848). Topic 848 provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, derivatives, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, derivatives, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. Topic 848 is currently effective and upon adoption may be applied prospectively to contract modifications and hedging relationships made on or before December 31, 2022. The Company is currently evaluating the pronouncement to determine the impact it may have on the Company's condensed consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Apr. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The carrying values of the Company’s financial instruments, including accounts receivable and accounts payable, approximate their fair values due to the short period of time to maturity or repayment. The following table summarizes fair value measurements by level for the assets measured at fair value on a recurring basis as of April 2, 2022, and October 2, 2021: April 2, 2022 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money market funds (cash equivalents) $ 411,573 $ — $ — $ 411,573 October 2, 2021 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money market funds (cash equivalents) $ 484,482 $ — $ — $ 484,482 |
Revenue and Geographic Informat
Revenue and Geographic Information | 6 Months Ended |
Apr. 02, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Geographic Information | 4. Revenue and Geographic Information Disaggregation of revenue Revenue by geographical region also includes the applicable service revenue for software upgrades and cloud-based services attributable to each region and is based on ship-to address, is as follows: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, (In thousands) Americas $ 238,193 $ 193,938 $ 612,006 $ 561,177 Europe, Middle East and Africa (“EMEA”) 128,431 114,306 373,912 354,313 Asia Pacific (“APAC”) 33,157 24,705 78,344 63,042 Total revenue $ 399,781 $ 332,949 $ 1,064,262 $ 978,532 Revenue is attributed to individual countries based on ship-to address and also includes the applicable service revenue for software upgrades and cloud-based services attributable to each country. Revenue by significant countries is as follows: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, (In thousands) United States $ 219,082 $ 178,019 $ 566,729 $ 508,915 Other countries 180,699 154,930 497,533 469,617 Total revenue $ 399,781 $ 332,949 $ 1,064,262 $ 978,532 Revenue by product category also includes the applicable service revenue for software upgrades and cloud-based services attributable to each product category. Revenue by major product category is as follows: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, (In thousands) Sonos speakers $ 317,734 $ 267,534 $ 819,620 $ 795,050 Sonos system products 61,220 52,062 195,965 149,820 Partner products and other revenue 20,827 13,353 48,677 33,662 Total revenue $ 399,781 $ 332,949 $ 1,064,262 $ 978,532 |
Balance Sheet Components
Balance Sheet Components | 6 Months Ended |
Apr. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | 5. Balance Sheet Components Accounts receivable, net of allowances Accounts receivable, net of allowances, consist of the following: April 2, October 2, (In thousands) Accounts receivable $ 128,989 $ 121,486 Allowance for credit losses ( 1,913 ) ( 1,547 ) Allowance for sales incentives ( 15,688 ) ( 19,160 ) Accounts receivable, net of allowances $ 111,388 $ 100,779 Inventories Inventories, net, consist of the following: April 2, October 2, (In thousands) Finished goods $ 208,476 $ 154,608 Component parts 55,929 30,522 Inventories $ 264,405 $ 185,130 The Company writes down inventory as a result of excess and obsolete inventories, or when it believes that the net realizable value of inventories is less than the carrying value. Goodwill The following table presents the changes in carrying amount of goodwill during the six months ended April 2, 2022: (In thousands) Balance as of October 2, 2021 $ 15,545 Goodwill acquired 22,181 Balance as of April 2, 2022 $ 37,726 Intangible assets The following table reflects the changes in the net carrying amount of the components of intangible assets associated with the Company's acquisition activity: April 2, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted-Average Remaining Life (In thousands, except weighted-average remaining life) Technology $ 13,931 $ ( 5,143 ) $ 8,788 2.63 Total finite-lived intangible assets 13,931 ( 5,143 ) 8,788 2.63 In-process research and development not subject to amortization 20,100 — 20,100 Total intangible assets $ 34,031 $ ( 5,143 ) $ 28,888 The following table summarizes the estimated future amortization expense of the Company's intangible assets as of April 2, 2022: Fiscal years ending Future Amortization Expense (In thousands) Remainder of fiscal 2022 $ 1,931 2023 3,237 2024 3,024 2025 423 2026 94 2027 and there after 79 Total future amortization expense $ 8,788 Cloud Computing Arrangements Beginning in fiscal 2020, and continuing through fiscal 2021, the Company began activities to replace its legacy enterprise resource management system in order to accommodate the Company's expanding operations. Capitalized costs were $ 22.6 million and $ 14.3 million as of April 2, 2022, and October 2, 2021, respectively, and are reported as a component of other assets on the Company's condensed consolidated balance sheets. Accrued expenses Accrued expenses consisted of the following: April 2, October 2, (In thousands) Accrued advertising and marketing $ 13,751 $ 19,989 Accrued taxes 13,710 16,941 Accrued inventory 25,971 37,117 Accrued manufacturing, logistics and product development 17,647 14,943 Accrued general and administrative expenses 20,010 13,066 Other accrued payables 9,255 5,973 Total accrued expenses $ 100,344 $ 108,029 Deferred revenue Amounts invoiced in advance of revenue recognition are recorded as deferred revenue on the condensed consolidated balance sheets. Deferred revenue primarily related to revenue allocated to unspecified software upgrades and cloud-based services. Recognition of revenue includes $ 18.8 million of deferred revenue from the fourth quarter of fiscal 2021 related to newly launched products sold to resellers not recognized as revenue until the date of general availability was reached, which was in the first quarter of fiscal 2022. The following table presents the changes in the Company’s deferred revenue for the six months ended April 2, 2022, and April 3, 2021: April 2, April 3, (In thousands) Deferred revenue, beginning of period $ 89,498 $ 62,389 Recognition of revenue included in beginning of period deferred revenue ( 28,927 ) ( 7,883 ) Revenue deferred, net of revenue recognized on contracts in the respective period 16,063 16,383 Deferred revenue, end of period $ 76,634 $ 70,889 The Company expects the following recognition of deferred revenue as of April 2, 2022: For the fiscal years ending 2022 2023 2024 2025 2026 and Total (In thousands) Deferred revenue expected to be recognized $ 9,750 $ 16,859 $ 14,809 $ 12,498 $ 22,718 $ 76,634 Other current liabilities Other current liabilities consist of the following: April 2, October 2, (In thousands) Reserve for returns $ 18,839 $ 19,266 Short-term operating lease liabilities 9,923 10,724 Product warranty liability 8,756 5,604 Other 4,066 3,950 Total other current liabilities $ 41,584 $ 39,544 The following table presents the changes in the Company’s warranty liability for the six months ended April 2, 2022, and April 3, 2021: April 2, April 3, (In thousands) Warranty liability, beginning of period $ 5,604 $ 3,628 Provision for warranties issued during the period 7,082 8,844 Settlements of warranty claims during the period ( 3,930 ) ( 7,616 ) Warranty liability, end of period $ 8,756 $ 4,856 |
Debt
Debt | 6 Months Ended |
Apr. 02, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt On October 13, 2021, the Company entered into a Revolving Credit Agreement with JPMorgan Chase Bank, N.A., as the administrative agent, and the lenders party thereto (the “Revolving Credit Agreement”). The Revolving Credit Agreement replaced the Company’s prior $ 80.0 million credit facility with JPMorgan Chase Bank, N.A., which matured in October 2021, in its entirety. The Revolving Credit Agreement provides for (i) a five-year senior secured revolving credit facility in the amount of up to $ 100.0 million and (ii) an uncommitted incremental facility subject to certain conditions. Proceeds are to be used for working capital and general corporate purposes. The facility may be drawn as an Alternative Base Rate Loan (at 1.00 % plus an applicable margin) or Eurocurrency Loans (at LIBOR plus an applicable margin). The Company must also pay (i) an unused commitment fee ranging from 0.200 % to 0.275 % per annum of the average daily unused portion of the aggregate revolving credit commitment under the agreement and (ii) a per annum fee equal to the applicable margin over LIBOR multiplied by the aggregate face amount of outstanding letters of cred it. As of April 2, 2022, the Company did not have any outstanding borrowings and had $ 2.9 million in undrawn letters of credit that reduce the availability under the Revolving Credit Agreement. The Company’s obligations under the Revolving Credit Agreement are secured by substantially all of the Company’s assets. The Revolving Credit Agreement contains customary representations and warranties, customary affirmative and negative covenants, a financial covenant that is tested quarterly and requires the Company to maintain a certain consolidated leverage ratio, and customary events of default. As of April 2, 2022, the Company was in compliance with all financial covenants under the Revolving Credit Agreement. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Apr. 02, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Legal proceedings From time to time, the Company is involved in legal proceedings in the ordinary course of business, including claims relating to employee relations, business practices, and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity or results of operations. On January 7, 2020, the Company filed a complaint with the U.S. International Trade Commission ("ITC") against Alphabet Inc. ("Alphabet") and Google LLC ("Google") and a lawsuit in the U.S. District Court for the Central District of California against Google. The complaint and lawsuit each allege infringement by Alphabet and Google of certain Sonos patents related to its smart speakers and related technology. On February 6, 2020, the ITC initiated a formal investigation into the Company’s claims. Google and Alphabet filed an initial answer in the ITC action on February 27, 2020, and an amended answer on April 3, 2020, denying infringement and alleging that the asserted patents are invalid. On August 13, 2021, an administrative law judge at the ITC issued an initial determination finding all five of Sonos' asserted patents to be valid and infringed by Google. The judge also ruled that certain proposed redesigns of Google products, one specific redesign per patent, would qualify as non-infringing alternatives to Google's current product designs. On January 6, 2022, the ITC ratified the conclusions of the administrative law judge and issued a limited exclusion order and a cease and desist order with respect to a wide range of accused Google products, including Google media players and computer devices configured to control these media players, such as Pixel phones and tablets. On March 4, 2020, the California District Court stayed the district court proceeding pending resolution of the ITC investigation and corresponding appeals. On March 11, 2020, Google filed an answer in the California District Court, denying infringement and alleging that the asserted patents are invalid. On September 28, 2020, Google filed for a declaratory judgement of non-infringement in the U.S. District Court for the Northern District of California related to five different Sonos patents. On September 29, 2020, the Company filed a lawsuit against Google in the U.S. District Court for Western District of Texas, alleging infringement of those five Sonos patents and seeking monetary damages and other non-monetary relief. This dispute over venue has now been resolved, with the case proceeding in the Northern District of California, where the judge has bifurcated the case, scheduling early disposition of two representative claims in mid-2022 and trial on all other claims in May 2023. On January 21, 2022, the judge permitted Google to amend its declaratory judgement claim to include claims for breach of contract and conversion against the Company in connection with one of the asserted patents regarding Google and the Company’s collaboration in 2013. The Company disputes the claims and intends to defend these claims during the case. On December 1, 2020, the Company filed a lawsuit against two Google foreign subsidiaries in the regional court of Hamburg, Germany, alleging infringement of a Sonos patent related to control of playback of media by mobile and playback devices and seeking non-monetary relief. Sonos has chosen to withdraw these preliminary injunction actions after having received some preliminary relief. On June 11, 2020, Google filed a lawsuit in the U.S. District Court for the Northern District of California against the Company, alleging infringement of five Google patents generally related to noise cancellation, digital rights management, media search, modifying favorite items and wireless relays, and seeking monetary damages and other non-monetary relief. On November 2, 2020, the California District Court granted Sonos’ motion to dismiss Google’s allegation of infringement of one of these five Google patents, specifically a patent generally related to media search, finding that the invention at issue is patent ineligible. On June 4, 2021, the California District Court granted a stipulation to dismiss Google's allegation of infringement of another asserted patent involving noise cancellation. In May 2021, the Company filed petitions for review at the United States Patent and Trademark Office ("USPTO") of two Google patents asserted against the Company in this matter, specifically the patents related to modifying favorite items and wireless relays. In October and November 2021, the USPTO instituted review of these patents, with a final decision expected in late 2022. In January 2022, the California District Court judge stayed the litigation against the Company with respect to all common issues. On June 12, 2020, Google filed lawsuits in District Court Munich I against Sonos Europe B.V. and Sonos, Inc., alleging infringement of two Google patents generally related to digital rights management and search notifications, and seeking monetary damages and an injunction preventing sales of any infringing Sonos products. On January 14, 2021, Google amended its infringement complaint related to the search notifications patent to relate to a limited version of the claims, in view of prior art cited by the Company. On March 3, 2021, the District Court Munich stayed a case for infringement of the search notifications patent pending the outcome of a nullity action based on doubt as to the validity of the patent. On June 23, 2021, the Munich court issued a decision dismissing Google's complaint related to the digital rights management patent for lack of infringement of at least two claim features. On August 30, 2021, Google appealed the Munich court's ruling, which appeal is still pending. On August 21, 2020, Google filed a lawsuit against Sonos, Inc. in Canada, alleging infringement of one Google patent generally related to noise cancellation technology. On August 21, 2020, Google filed a lawsuit against Sonos Europe B.V. and Sonos, Inc. in France, alleging infringement of two Google patents generally related to digital rights management and search notifications, and seeking monetary damages and an injunction preventing sales of any infringing Sonos products. On February 8, 2021, Google withdrew its infringement allegations regarding the search notifications patent in view of prior art brought to the attention of the court by the Company. On March 8, 2022, the French trial court ruled for Sonos on Google's digital rights management infringement claim. Google has appealed the French trial court's ruling, which appeal is pending. In August 2020, Google filed a lawsuit against Sonos Europe B.V. and Sonos, Inc. in the Netherlands alleging infringement of a Google patent related to search notifications, and seeking monetary damages and an injunction preventing sales of any infringing Sonos products. In September 2020, Google filed a lawsuit against Sonos Europe B.V. in the Netherlands, alleging infringement of a Google patent related to digital rights management, and seeking monetary damages and enforcement of an injunction preventing sales of any infringing Sonos products, which was transferred to the Midden-Netherlands court on March 22, 2021, following the grant of the Company's challenge to improper jurisdiction. On February 9, 2022, the Midden-Netherlands court rejected Google's claims related to the digital rights management patent. On March 22, 2022, Google appealed the Midden-Netherlands' court decision, which is still pending. A range of loss, if any, associated with these matters is not probable or reasonably estimable as of April 2, 2022. On March 10, 2017, Implicit, LLC (“Implicit”) filed a patent infringement action in the United States District Court, District of Delaware against the Company. Implicit is asserting that the Company infringed on two patents in this case. The Company denies the allegations. There is no assurance of a favorable outcome and the Company’s business could be adversely affected as a result of a finding that the Company patents-in-suit are invalid and/or unenforceable. A range of loss, if any, associated with this matter is not probable or reasonably estimable as of April 2, 2022. The Company is involved in certain other litigation matters not listed above but does not consider these matters to be material either individually or in the aggregate at this time. The Company’s view of the matters not listed may change in the future as the litigation and events related thereto unfold. On May 13, 2020, the Company was granted a temporary exclusion from the August 2019 Section 301 Tariff Action (List 4A) ("Section 301 tariffs") for its component products. On July 23, 2020, the Company was granted a temporary exclusion from Section 301 tariffs for its core speaker products. These exclusions eliminated the tariffs on the Company's component and core speaker products imported from China until August 31, 2020, and entitled the Company to a refund for the tariffs paid since September 2019, the date the Section 301 tariffs were imposed. On August 28, 2020, the United States Trade Representative granted an extension through December 31, 2020, of the exclusion for the Company’s core speaker products, with the Section 301 tariffs for our core speaker products automatically reinstated on January 1, 2021. The exclusion for the Company’s component products was not extended past August 31, 2020, with the Section 301 tariffs for our component products automatically reinstated on September 1, 2020. Tariff refund claims are subject to review and approval by U.S. Customs and Border Protection. For the three and six months ended April 2, 2022, the Company recognized $ 2.9 million and $ 4.7 million, respectively, in refunds based upon acceptance of the Company's refund request, recognized as a reduction to cost of revenue. The remaining outstanding tariff refund the Company expects to recover is approximately $ 9.5 million. The Company did not record these potential refunds due to uncertainty of the timing of acceptance of approval, but such refunds will be recognized as a reduction to cost of revenue if and when acceptance occurs. In March 2022, the Company was granted an exclusion extension from the Section 301 tariffs for its core speaker products, including certain new product introductions. This exclusion extension eliminates the tariffs on the Company's core speaker products imported from China from April 13, 2022 to December 31, 2022, and entitles the Company to an estimated refund of $ 10.0 million for the tariffs paid from October 12, 2021 to April 12, 2022. The Company did not record these potential refunds due to uncertainty of the timing of acceptance of approval, but such refunds will be recognized as a reduction to cost of revenue if and when acceptance occurs. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Apr. 02, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders' Equity On November 17, 2021, the Board of Directors (the "Board") authorized a common stock repurchase program of up to $ 150.0 million. During the six months ended April 2, 2022 , the Company repurchased 2,644,170 shares for an aggregate purchase price of $ 74.5 million at an average price of $ 28.15 per share under the repurchase program. The Company had $ 75.5 million available for share repurchases under the repurchase program as of April 2, 2022. Treasury stock during the six months ended April 2, 2022, included shares withheld to satisfy employees' tax withholding requirements in connection with vesting of RSUs. Additionally, during the six months ended April 2, 2022, the Company retired 3,428,470 shares of treasury stock. |
Stock-based Compensation
Stock-based Compensation | 6 Months Ended |
Apr. 02, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | 9. Stock-based Compensation 2018 Equity Incentive Plan In July 2018, the Board adopted the 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan became effective in connection with the Company's initial public offering ("IPO"). The number of shares reserved for issuance under the 2018 Plan increases automatically on January 1 of each year beginning in 2019 and continuing through 2028 by a number of shares of common stock equal to the lesser of (x) 5 % of the total outstanding shares of the Company’s common stock and common stock equivalents as of the immediately preceding December 31 (rounded to the nearest whole share) and (y) a number of shares determined by the Company's the Board. Stock options Pursuant to the 2018 Plan, the Company issues stock options to employees and directors. The fair value of the stock options is based on the Company’s closing stock price on the trading day immediately prior to the date of grant. The option price, number of shares, and grant date are determined at the discretion of the Board. For so long as the option holder performs services for the Company, the options generally vest over 48 months , on a monthly or quarterly basis, with certain options subject to an initial annual cliff vest, and are exercisable for a period not to exceed ten years from the date of grant. The summary of the Company’s stock option activity is as follows: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at October 2, 2021 14,545,239 $ 12.86 5.1 $ 282,141 Granted — — Exercised ( 2,526,447 ) 11.59 Expired ( 340 ) 2.50 Forfeited ( 18,072 ) 15.05 Outstanding at April 2, 2022 12,000,380 $ 13.13 4.9 $ 174,640 At April 2, 2022 Options exercisable 11,234,842 $ 13.06 4.7 $ 164,249 Options vested and expected to vest 11,940,890 $ 13.12 4.9 $ 173,829 As of April 2, 2022, and October 2, 2021, the Company had $ 2.5 million and $ 6.2 million, respectively, of unrecognized stock-based compensation expense related to stock options, which are expected to be recognized over weighted-average periods of 0.7 and 0.9 years, respectively. Restricted stock units Pursuant to the 2018 Plan, the Company issues RSUs to employees and directors. The fair value of RSUs is based on the Company's closing stock price on the trading day immediately preceding the date of grant. RSUs vest quarterly over the service period, which is generally four years , with certain awards subject to an initial annual cliff vest. The summary of the Company’s RSU activity is as follows: Number of Units Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value (In thousands) Outstanding at October 2, 2021 9,283,525 $ 12.64 $ 299,487 Granted 2,958,133 32.04 Released ( 2,004,895 ) 13.47 Forfeited ( 512,347 ) 17.55 Outstanding at April 2, 2022 9,724,416 $ 18.11 $ 269,172 At April 2, 2022 Units expected to vest 8,328,841 $ 17.73 $ 230,542 As of April 2, 2022, and October 2, 2021, the Company had $ 134.5 million and $ 90.0 million of unrecognized stock-based compensation expense related to RSUs, which are expected to be recognized over weighted-average periods of 2.7 and 2.5 years, respectively. Performance stock units ("PSU") Pursuant to the 2018 Plan, the Company issues PSUs that vest on the satisfaction of service and performance conditions. The Company estimates the fair value of PSUs on the grant date and recognizes compensation expense in the period it becomes probable that performance conditions will be achieved. On a quarterly basis, the Company re-evaluates the assumption of the probability that performance conditions will be satisfied and revises its estimates as appropriate as new or updated information becomes available. The summary of the Company’s PSU activity is as follows: Number of Units Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value (In thousands) Outstanding at October 2, 2021 158,521 $ 22.81 $ 5,114 Granted 252,296 29.71 Vested — — Forfeited — — Outstanding at April 2, 2022 410,817 $ 27.05 $ 11,371 As of April 2, 2022, and October 2, 2021, the Company had $ 6.8 million and $ 3.6 million of unrecognized stock-based compensation expense related to PSUs, which are expected to be recognized over weighted-average periods of 1.1 and 1.2 years, respectively. Stock-based compensation Total stock-based compensation expense by functional category was as follows: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, (In thousands) Cost of revenue $ 377 $ 261 $ 705 $ 474 Research and development 8,091 6,683 14,829 12,942 Sales and marketing 4,177 3,632 7,824 7,040 General and administrative 8,580 5,787 15,326 10,751 Total stock-based compensation expense $ 21,225 $ 16,363 $ 38,684 $ 31,207 |
Income Taxes
Income Taxes | 6 Months Ended |
Apr. 02, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The Company’s tax provision and the resulting effective tax rate for interim periods is determined based upon its estimated annual effective tax rate ("AETR"), adjusted for the effect of discrete items arising in that quarter. The impact of such inclusions could result in a higher or lower effective tax rate during a quarter, based upon the mix and timing of actual earnings or losses versus annual projections. In each quarter, the Company updates its estimate of the AETR, and if the estimated AETR changes, a cumulative adjustment is made in that quarter. The Company recorded a benefit from income taxes of $ 0.8 million and $ 6.5 million for the three months ended April 2, 2022, and April 3, 2021, respectively, related to U.S. and non-U.S. income taxes. The Company recorded a provision for income taxes of $ 6.9 million and $ 2.6 million for the six months ended April 2, 2022 and April 3, 2021, respectively. For the three months ended April 2, 2022, and April 3, 2021, the Company's tax provision includes a discrete income tax benefit for U.S. share-based compensation. For the six months ended April 2, 2022, the Company's tax provision includes a discrete income tax benefit for the release of a portion of our U.S. valuation allowance as a result of an acquisition in the first quarter and U.S. share-based compensation. For the six months ended April 3, 2021, the Company’s tax provision includes a discrete income tax benefit for U.S. share-based compensation. For the three and six months ended April 2, 2022, the Company maintained a full valuation allowance on its deferred tax assets in the U.S. and certain other non-US entities due to a history of operating losses. It is possible that within the next 12 months there may be sufficient positive evidence to release a portion or all of the valuation allowance. Release of the valuation allowance in the U.S. and certain other non-US entities would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings. The timing and amount of the potential valuation allowance release are subject to significant management judgment, as well as prospective earnings in the U.S. and certain other non-US entities. |
Net Income Per Share Attributab
Net Income Per Share Attributable to Common Stockholders | 6 Months Ended |
Apr. 02, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share Attributable to Common Stockholders | 11. Net Income Per Share Attributable to Common Stockholders Basic net income per share attributable to common stockholders is calculated by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding less shares subject to repurchase. Diluted net income per share attributable to common stockholders adjusts the basic net income per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potentially dilutive impact of stock awards, using the treasury stock method. The following table sets forth the computation of the Company’s basic and diluted net income per share attributable to common stockholders: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, (In thousands, except share and per share data) Numerator: Net income attributable to common stockholders - basic and diluted $ 8,566 $ 17,221 $ 132,047 $ 149,513 Denominator: Weighted-average shares of common stock—basic 128,112,234 121,880,615 127,887,530 118,745,569 Effect of potentially dilutive stock options 6,367,917 12,040,149 7,265,077 10,073,032 Effect of RSUs 4,976,580 9,105,551 5,641,563 8,016,629 Effect of PSUs 185,839 29,231 188,339 14,616 Weighted-average shares of common stock—diluted 139,642,570 143,055,546 140,982,509 136,849,846 Net income per share attributable to common stockholders: Basic $ 0.07 $ 0.14 $ 1.03 $ 1.26 Diluted $ 0.06 $ 0.12 $ 0.94 $ 1.09 The following potentially dilutive shares were excluded from the computation of diluted net income per share attributable to common stockholders because including them would have been antidilutive: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, Stock options to purchase common stock 6,360,832 7,523,579 6,099,887 12,299,023 Restricted stock units 5,024,253 3,219,598 4,277,081 4,354,744 Performance stock units 115,668 44,217 113,169 22,109 Total 11,500,753 10,787,394 10,490,137 16,675,876 |
Retirement Plans
Retirement Plans | 6 Months Ended |
Apr. 02, 2022 | |
Retirement Benefits [Abstract] | |
Retirement Plans | 12. Retirement Plans The Company has a defined contribution 401(k) plan (the "401(k) Plan") for the Company’s U.S.-based employees, as well as various defined contribution plans for its international employees. Eligible U.S. employees may make tax-deferred contributions under the 401(k) plan but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code of 1986, as amended (the "Code"). The Company matches contributions towards the 401(k) Plan and international defined contribution plans. The Company's matching contributions totaled $ 2.1 million and $ 1.8 million for the three months ended April 2, 2022, and April 3, 2021, respectively. The Company's matching contributions totaled $ 4.0 million and $ 3.5 million for the six months ended April 2, 2022, and April 3, 2021 , respectively. |
Business Combinations
Business Combinations | 6 Months Ended |
Apr. 02, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | 13. Business Combinations During the first quarter of fiscal 2022, the Company completed two acquisitions for a combined aggregate cash consideration of approximately $ 27.1 million. The acquisitions brought talented employees and strategic intellectual property ("IP") to enhance the experience of Sonos products. The Company accounted for these transactions as business combinations and allocated the purchase consideration to assets acquired and liabilities assumed. In aggregate, $ 0.2 million was attributed to net assets acquired, $ 6.2 million to intangible assets, $ 1.5 million in deferred tax liabilities, and $ 22.2 million to goodwill. The goodwill recognized was primarily attributable to the assembled workforce and expected post-acquisition synergies from these acquisitions. Goodwill is not deductible for tax purposes. The transaction costs associated with the acquisitions were not material and were expensed as incurred, as general and administrative expenses in the condensed consolidated statements of operations and comprehensive income. Pro forma results of operations for these acquisitions have not been presented because they are not material to the Company's condensed consolidated financial statements, either individually or in the aggregate. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Apr. 02, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | 14. Subsequent Event On April 8, 2022, the Company completed the acquisition of Mayht Holding BV (“Mayht”), a Netherlands-based company that has invented a new approach to audio transducers. The acquisition will be accounted for as a business combination, and the Company will begin consolidating Mayht’s financial results in its condensed consolidated financial statements in the third quarter of fiscal 2022. The Company acquired 100 % of the equity interests of Mayht for approximately $ 100.0 million in cash. Given the recent date of the acquisition, the Company has not finalized its determination of the fair value of the assets acquired and liabilities assumed. |
Business Overview and Basis o_2
Business Overview and Basis of Presentation (Policies) | 6 Months Ended |
Apr. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation and preparation | Basis of presentation and preparation The accompanying condensed consolidated financial statements are unaudited. The condensed consolidated balance sheet as of October 2, 2021, has been derived from the audited consolidated financial statements of the Company. The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for annual financial statements. They should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended October 2, 2021, (the “Annual Report”), filed with the SEC on November 22, 2021. In management’s opinion, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations, and its cash flows for the interim periods presented. The results of operations for the three and six months ended April 2, 2022, are not necessarily indicative of the results to be expected for the full fiscal year or any other period. The Company operates on a 52- week or 53- week fiscal year ending on the Saturday nearest September 30 each year. The Company’s fiscal year is divided into four quarters of 13 weeks, each beginning on a Sunday and containing two 4-week periods followed by a 5-week period. An additional week is included in the fourth fiscal quarter approximately every five years to realign fiscal quarters with calendar quarters. This last occurred in the fourth quarter of the Company’s fiscal year ended October 3, 2020, and will reoccur in the fiscal year ending October 3, 2026. The six months ended April 2, 2022, and April 3, 2021 , spanned 26 weeks each. As used in this Quarterly Report on Form 10-Q, “fiscal 2022” refers to the fiscal year ending October 1, 2022, “fiscal 2021” refers to the fiscal year ended October 2, 2021, and "fiscal 2020” refers to the fiscal year ended October 3, 2020. |
Use of estimates and judgment | Use of estimates and judgments The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates and judgments compared to historical experience and expected trends. In March 2020, the outbreak of the novel coronavirus (COVID-19) was declared a pandemic. While the nature of the situation is dynamic, the Company has considered the impact when developing its estimates and assumptions noted above. Actual results and outcomes may differ from management's estimates and assumptions. |
Recently adopted accounting pronouncements and recent accounting pronouncements pending adoption | Recently adopted accounting pronouncements In December 2019, the Financial Accounting Standards Board ("FASB") issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification Topic 740 ("ASC 740") as well as by improving consistent application of the topic by clarifying and amending existing guidance. The Company adopted this standard in the first quarter of fiscal 2022. The adoption did not have a material impact on the Company's condensed consolidated financial statements. Recent accounting pronouncements pending adoption In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This update requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. This standard is effective for the Company in the first quarter of fiscal 2024, with early adoption permitted. The Company is currently evaluating the pronouncement and does not expect it to have a material impact on the Company's consolidated financial statements or disclosures. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting, and then issued a subsequent amendment to the initial guidance under ASU No. 2021-01 (collectively Topic 848). Topic 848 provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, derivatives, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, derivatives, and other transactions that reference the London interbank offered rate (“LIBOR”) or another reference rate expected to be discontinued as a result of reference rate reform. Topic 848 is currently effective and upon adoption may be applied prospectively to contract modifications and hedging relationships made on or before December 31, 2022. The Company is currently evaluating the pronouncement to determine the impact it may have on the Company's condensed consolidated financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Apr. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of fair value measurements by level for the assets measured on a recurring basis | The following table summarizes fair value measurements by level for the assets measured at fair value on a recurring basis as of April 2, 2022, and October 2, 2021: April 2, 2022 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money market funds (cash equivalents) $ 411,573 $ — $ — $ 411,573 October 2, 2021 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money market funds (cash equivalents) $ 484,482 $ — $ — $ 484,482 |
Revenue and Geographic Inform_2
Revenue and Geographic Information (Tables) | 6 Months Ended |
Apr. 02, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | Revenue by geographical region also includes the applicable service revenue for software upgrades and cloud-based services attributable to each region and is based on ship-to address, is as follows: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, (In thousands) Americas $ 238,193 $ 193,938 $ 612,006 $ 561,177 Europe, Middle East and Africa (“EMEA”) 128,431 114,306 373,912 354,313 Asia Pacific (“APAC”) 33,157 24,705 78,344 63,042 Total revenue $ 399,781 $ 332,949 $ 1,064,262 $ 978,532 Revenue is attributed to individual countries based on ship-to address and also includes the applicable service revenue for software upgrades and cloud-based services attributable to each country. Revenue by significant countries is as follows: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, (In thousands) United States $ 219,082 $ 178,019 $ 566,729 $ 508,915 Other countries 180,699 154,930 497,533 469,617 Total revenue $ 399,781 $ 332,949 $ 1,064,262 $ 978,532 Revenue by product category also includes the applicable service revenue for software upgrades and cloud-based services attributable to each product category. Revenue by major product category is as follows: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, (In thousands) Sonos speakers $ 317,734 $ 267,534 $ 819,620 $ 795,050 Sonos system products 61,220 52,062 195,965 149,820 Partner products and other revenue 20,827 13,353 48,677 33,662 Total revenue $ 399,781 $ 332,949 $ 1,064,262 $ 978,532 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 6 Months Ended |
Apr. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of accounts receivable | Accounts receivable, net of allowances, consist of the following: April 2, October 2, (In thousands) Accounts receivable $ 128,989 $ 121,486 Allowance for credit losses ( 1,913 ) ( 1,547 ) Allowance for sales incentives ( 15,688 ) ( 19,160 ) Accounts receivable, net of allowances $ 111,388 $ 100,779 |
Schedule of inventories | Inventories, net, consist of the following: April 2, October 2, (In thousands) Finished goods $ 208,476 $ 154,608 Component parts 55,929 30,522 Inventories $ 264,405 $ 185,130 |
Schedule of goodwill | The following table presents the changes in carrying amount of goodwill during the six months ended April 2, 2022: (In thousands) Balance as of October 2, 2021 $ 15,545 Goodwill acquired 22,181 Balance as of April 2, 2022 $ 37,726 |
Schedule of finite-lived intangible assets, future amortization expense | The following table reflects the changes in the net carrying amount of the components of intangible assets associated with the Company's acquisition activity: April 2, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Value Weighted-Average Remaining Life (In thousands, except weighted-average remaining life) Technology $ 13,931 $ ( 5,143 ) $ 8,788 2.63 Total finite-lived intangible assets 13,931 ( 5,143 ) 8,788 2.63 In-process research and development not subject to amortization 20,100 — 20,100 Total intangible assets $ 34,031 $ ( 5,143 ) $ 28,888 The following table summarizes the estimated future amortization expense of the Company's intangible assets as of April 2, 2022: Fiscal years ending Future Amortization Expense (In thousands) Remainder of fiscal 2022 $ 1,931 2023 3,237 2024 3,024 2025 423 2026 94 2027 and there after 79 Total future amortization expense $ 8,788 |
Schedule of accrued expenses | Accrued expenses consisted of the following: April 2, October 2, (In thousands) Accrued advertising and marketing $ 13,751 $ 19,989 Accrued taxes 13,710 16,941 Accrued inventory 25,971 37,117 Accrued manufacturing, logistics and product development 17,647 14,943 Accrued general and administrative expenses 20,010 13,066 Other accrued payables 9,255 5,973 Total accrued expenses $ 100,344 $ 108,029 |
Changes in deferred balances and expected revenue recognition | The following table presents the changes in the Company’s deferred revenue for the six months ended April 2, 2022, and April 3, 2021: April 2, April 3, (In thousands) Deferred revenue, beginning of period $ 89,498 $ 62,389 Recognition of revenue included in beginning of period deferred revenue ( 28,927 ) ( 7,883 ) Revenue deferred, net of revenue recognized on contracts in the respective period 16,063 16,383 Deferred revenue, end of period $ 76,634 $ 70,889 |
Remaining performance obligation | The Company expects the following recognition of deferred revenue as of April 2, 2022: For the fiscal years ending 2022 2023 2024 2025 2026 and Total (In thousands) Deferred revenue expected to be recognized $ 9,750 $ 16,859 $ 14,809 $ 12,498 $ 22,718 $ 76,634 |
Schedule of other current liabilities | Other current liabilities consist of the following: April 2, October 2, (In thousands) Reserve for returns $ 18,839 $ 19,266 Short-term operating lease liabilities 9,923 10,724 Product warranty liability 8,756 5,604 Other 4,066 3,950 Total other current liabilities $ 41,584 $ 39,544 |
Schedule of product warranty liability | The following table presents the changes in the Company’s warranty liability for the six months ended April 2, 2022, and April 3, 2021: April 2, April 3, (In thousands) Warranty liability, beginning of period $ 5,604 $ 3,628 Provision for warranties issued during the period 7,082 8,844 Settlements of warranty claims during the period ( 3,930 ) ( 7,616 ) Warranty liability, end of period $ 8,756 $ 4,856 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 6 Months Ended |
Apr. 02, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option activity | The summary of the Company’s stock option activity is as follows: Number of Options Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at October 2, 2021 14,545,239 $ 12.86 5.1 $ 282,141 Granted — — Exercised ( 2,526,447 ) 11.59 Expired ( 340 ) 2.50 Forfeited ( 18,072 ) 15.05 Outstanding at April 2, 2022 12,000,380 $ 13.13 4.9 $ 174,640 At April 2, 2022 Options exercisable 11,234,842 $ 13.06 4.7 $ 164,249 Options vested and expected to vest 11,940,890 $ 13.12 4.9 $ 173,829 |
Schedule of restricted stock unit activity | The summary of the Company’s RSU activity is as follows: Number of Units Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value (In thousands) Outstanding at October 2, 2021 9,283,525 $ 12.64 $ 299,487 Granted 2,958,133 32.04 Released ( 2,004,895 ) 13.47 Forfeited ( 512,347 ) 17.55 Outstanding at April 2, 2022 9,724,416 $ 18.11 $ 269,172 At April 2, 2022 Units expected to vest 8,328,841 $ 17.73 $ 230,542 |
Schedule of performance stock units activity | The summary of the Company’s PSU activity is as follows: Number of Units Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value (In thousands) Outstanding at October 2, 2021 158,521 $ 22.81 $ 5,114 Granted 252,296 29.71 Vested — — Forfeited — — Outstanding at April 2, 2022 410,817 $ 27.05 $ 11,371 |
Schedule of stock-based compensation expense | Total stock-based compensation expense by functional category was as follows: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, (In thousands) Cost of revenue $ 377 $ 261 $ 705 $ 474 Research and development 8,091 6,683 14,829 12,942 Sales and marketing 4,177 3,632 7,824 7,040 General and administrative 8,580 5,787 15,326 10,751 Total stock-based compensation expense $ 21,225 $ 16,363 $ 38,684 $ 31,207 |
Net Income Per Share Attribut_2
Net Income Per Share Attributable to Common Stockholders (Tables) | 6 Months Ended |
Apr. 02, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The following table sets forth the computation of the Company’s basic and diluted net income per share attributable to common stockholders: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, (In thousands, except share and per share data) Numerator: Net income attributable to common stockholders - basic and diluted $ 8,566 $ 17,221 $ 132,047 $ 149,513 Denominator: Weighted-average shares of common stock—basic 128,112,234 121,880,615 127,887,530 118,745,569 Effect of potentially dilutive stock options 6,367,917 12,040,149 7,265,077 10,073,032 Effect of RSUs 4,976,580 9,105,551 5,641,563 8,016,629 Effect of PSUs 185,839 29,231 188,339 14,616 Weighted-average shares of common stock—diluted 139,642,570 143,055,546 140,982,509 136,849,846 Net income per share attributable to common stockholders: Basic $ 0.07 $ 0.14 $ 1.03 $ 1.26 Diluted $ 0.06 $ 0.12 $ 0.94 $ 1.09 |
Schedule of antidilutive securities | The following potentially dilutive shares were excluded from the computation of diluted net income per share attributable to common stockholders because including them would have been antidilutive: Three Months Ended Six Months Ended April 2, April 3, April 2, April 3, Stock options to purchase common stock 6,360,832 7,523,579 6,099,887 12,299,023 Restricted stock units 5,024,253 3,219,598 4,277,081 4,354,744 Performance stock units 115,668 44,217 113,169 22,109 Total 11,500,753 10,787,394 10,490,137 16,675,876 |
Business Overview and Basis o_3
Business Overview and Basis of Presentation (Details) | Apr. 02, 2022Country |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of countries where products are distributed | 50 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Money Market Funds - USD ($) $ in Thousands | Apr. 02, 2022 | Oct. 02, 2021 |
Assets: | ||
Money market funds (cash equivalents) | $ 411,573 | $ 484,482 |
Level 1 | ||
Assets: | ||
Money market funds (cash equivalents) | 411,573 | 484,482 |
Level 2 | ||
Assets: | ||
Money market funds (cash equivalents) | 0 | 0 |
Level 3 | ||
Assets: | ||
Money market funds (cash equivalents) | $ 0 | $ 0 |
Revenue and Geographic Inform_3
Revenue and Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2022 | Apr. 03, 2021 | Apr. 02, 2022 | Apr. 03, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 399,781 | $ 332,949 | $ 1,064,262 | $ 978,532 |
Sonos speakers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 317,734 | 267,534 | 819,620 | 795,050 |
Sonos system products | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 61,220 | 52,062 | 195,965 | 149,820 |
Partner products and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 20,827 | 13,353 | 48,677 | 33,662 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 238,193 | 193,938 | 612,006 | 561,177 |
Europe, Middle East and Africa (“EMEA”) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 128,431 | 114,306 | 373,912 | 354,313 |
Asia Pacific (“APAC”) | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 33,157 | 24,705 | 78,344 | 63,042 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 219,082 | 178,019 | 566,729 | 508,915 |
Other countries | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 180,699 | $ 154,930 | $ 497,533 | $ 469,617 |
Balance Sheet Components - Acco
Balance Sheet Components - Accounts receivable, net of allowances (Details) - USD ($) $ in Thousands | Apr. 02, 2022 | Oct. 02, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 128,989 | $ 121,486 |
Allowance for credit losses | (1,913) | (1,547) |
Allowance for sales incentives | (15,688) | (19,160) |
Accounts receivable, net of allowances | $ 111,388 | $ 100,779 |
Balance Sheet Components - Inve
Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands | Apr. 02, 2022 | Oct. 02, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 208,476 | $ 154,608 |
Component parts | 55,929 | 30,522 |
Inventories | $ 264,405 | $ 185,130 |
Balance Sheet Components - Good
Balance Sheet Components - Goodwill (Details) $ in Thousands | 3 Months Ended |
Jan. 01, 2022USD ($) | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | $ 15,545 |
Goodwill acquired | $ 22,181 |
Balance Sheet Components - Fini
Balance Sheet Components - Finite-lived intangible assets, future amortization expense (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 02, 2022 | Oct. 02, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 13,931 | |
Accumulated Amortization | (5,143) | |
Net Carrying Value | 8,788 | |
Intangible assets, gross carrying amount (excluding goodwill) | 34,031 | |
Intangible assets, net carrying value (excluding goodwill) | $ 28,888 | $ 24,450 |
Weighted-Average Remaining Life | 2 years 7 months 17 days | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of fiscal 2022 | $ 1,931 | |
2023 | 3,237 | |
2024 | 3,024 | |
2025 | 423 | |
2026 | 94 | |
2027 and there after | 79 | |
Net Carrying Value | 8,788 | |
In-process research and development not subject to amortization | ||
Finite-Lived Intangible Assets [Line Items] | ||
In-process research and development not subject to amortization | 20,100 | |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 13,931 | |
Accumulated Amortization | (5,143) | |
Net Carrying Value | $ 8,788 | |
Weighted-Average Remaining Life | 2 years 7 months 17 days | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Net Carrying Value | $ 8,788 |
Balance Sheet Components - Addi
Balance Sheet Components - Additional Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 02, 2022 | Oct. 02, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Capitalized costs | $ 22.6 | $ 14.3 |
Recognition of revenue | $ 18.8 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued expenses (Details) - USD ($) $ in Thousands | Apr. 02, 2022 | Oct. 02, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued advertising and marketing | $ 13,751 | $ 19,989 |
Accrued taxes | 13,710 | 16,941 |
Accrued inventory | 25,971 | 37,117 |
Accrued manufacturing, logistics and product development | 17,647 | 14,943 |
Accrued general and administrative expenses | 20,010 | 13,066 |
Other accrued payables | 9,255 | 5,973 |
Total accrued expenses | $ 100,344 | $ 108,029 |
Balance Sheet Components - Chan
Balance Sheet Components - Change in deferred revenue (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Contract with Customer, Liability [Roll Forward] | ||
Deferred revenue, beginning of period | $ 89,498 | $ 62,389 |
Recognition of revenue included in beginning of period deferred revenue | (28,927) | (7,883) |
Revenue deferred, net of revenue recognized on contracts in the respective period | 16,063 | 16,383 |
Deferred revenue, end of period | $ 76,634 | $ 70,889 |
Balance Sheet Components - Expe
Balance Sheet Components - Expected revenue recognition (Details) $ in Thousands | Apr. 02, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized | $ 76,634 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-03 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized | $ 9,750 |
Performance obligations expected to be satisfied in | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-02 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized | $ 16,859 |
Performance obligations expected to be satisfied in | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized | $ 14,809 |
Performance obligations expected to be satisfied in | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized | $ 12,498 |
Performance obligations expected to be satisfied in | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-09-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized | $ 22,718 |
Performance obligations expected to be satisfied in |
Balance Sheet Components - Ex_2
Balance Sheet Components - Expected revenue recognition 1 (Details) $ in Thousands | Apr. 02, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Deferred revenue expected to be recognized | $ 76,634 |
Balance Sheet Components - Othe
Balance Sheet Components - Other current liabilities (Details) - USD ($) $ in Thousands | Apr. 02, 2022 | Oct. 02, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Reserve for returns | $ 18,839 | $ 19,266 |
Short-term operating lease liabilities | 9,923 | 10,724 |
Product warranty liability | 8,756 | 5,604 |
Other | 4,066 | 3,950 |
Total other current liabilities | $ 41,584 | $ 39,544 |
Balance Sheet Components - Prod
Balance Sheet Components - Product Warranties (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty liability, beginning of period | $ 5,604 | $ 3,628 |
Provision for warranties issued during the period | 7,082 | 8,844 |
Settlements of warranty claims during the period | (3,930) | (7,616) |
Warranty liability, end of period | $ 8,756 | $ 4,856 |
Debt - Additional Information (
Debt - Additional Information (Details) - Credit Facility - Revolving Credit Facility - USD ($) $ in Millions | Oct. 13, 2021 | Apr. 02, 2022 | Oct. 12, 2021 |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 100 | $ 80 | |
Term of debt | 5 years | ||
Undrawn letters of credit | $ 2.9 | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.20% | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.275% | ||
Base Rate | |||
Debt Instrument [Line Items] | |||
Interest rate, spread on variable rate | 1.00% |
Commitments and Contingencies -
Commitments and Contingencies - Textual (Details) $ in Millions | Aug. 13, 2021Patent | Jun. 23, 2021Claimfeature | Dec. 01, 2020Plaintiff | Nov. 02, 2020Patent | Sep. 29, 2020Patent | Sep. 28, 2020Patent | Aug. 21, 2020Patent | Jun. 12, 2020Patent | Jun. 11, 2020Patent | Mar. 10, 2017Patent | Apr. 02, 2022USD ($) | Apr. 02, 2022USD ($)Patent | Mar. 31, 2022USD ($) |
Loss Contingencies [Line Items] | |||||||||||||
Tariff refund | $ | $ 9.5 | $ 9.5 | $ 10 | ||||||||||
Implicit, LLC | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Loss contingency, patents allegedly infringed upon, number | 2 | ||||||||||||
Alphabet Inc. ("Alphabet") and Google LLC ("Google") | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Gain contingency, patents found infringed upon | 5 | ||||||||||||
Gain contingency, patents allegedly infringed upon, number | 5 | 5 | |||||||||||
Sonos, Inc. | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Gain contingency, patents allegedly infringed upon, number | 2 | ||||||||||||
Gain contingency, patents allegedly infringed upon, number of claim features scheduled for early disposition | 2 | ||||||||||||
Loss contingency, patents allegedly infringed upon, number | 5 | ||||||||||||
Loss contingency, patents found not infringed upon, number | 1 | ||||||||||||
Gain contingency, patents found not infringed, number of claim features | Claimfeature | 2 | ||||||||||||
Sonos, Inc. | Canada | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Gain contingency, patents allegedly infringed upon, number | 1 | ||||||||||||
Sonos, Inc. | Europe and France | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Gain contingency, patents allegedly infringed upon, number | 2 | ||||||||||||
Google Foreign Subsidiaries | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Gain contingency, patent allegedly infringed upon, number of defendants | Plaintiff | 2 | ||||||||||||
Government | |||||||||||||
Loss Contingencies [Line Items] | |||||||||||||
Income tax examination, refund | $ | $ 2.9 | $ 4.7 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |
Apr. 02, 2022 | Nov. 17, 2021 | |
Equity [Abstract] | ||
Stock repurchase program, authorized value | $ 150 | |
Purchase of treasury stock (in shares) | 2,644,170 | |
Purchase price of common stock | $ 74.5 | |
Average price per share (in dollars per share) | $ 28.15 | |
Remaining authorized repurchase amount | $ 75.5 | |
Retirement of treasury stock (in shares) | 3,428,470 |
Stock-based Compensation - Addi
Stock-based Compensation - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended |
Jul. 31, 2018 | Apr. 02, 2022 | Oct. 02, 2021 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 48 months | ||
Exercisable period | 10 years | ||
Unrecognized stock-based compensation expense | $ 2.5 | $ 6.2 | |
Unrecognized stock-based compensation expense, period of recognition | 8 months 12 days | 10 months 24 days | |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Unrecognized stock-based compensation expense | $ 134.5 | $ 90 | |
Unrecognized stock-based compensation expense, period of recognition | 2 years 8 months 12 days | 2 years 6 months | |
Performance Share Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized stock-based compensation expense | $ 6.8 | $ 3.6 | |
Unrecognized stock-based compensation expense, period of recognition | 1 year 1 month 6 days | 1 year 2 months 12 days | |
2018 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of outstanding stock maximum | 5.00% |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Apr. 02, 2022USD ($)$ / sharesshares | Oct. 02, 2021USD ($)$ / sharesshares | |
Number of Options | ||
Beginning balance (in shares) | shares | 14,545,239 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | (2,526,447) | |
Expired (in shares) | shares | (340) | |
Forfeited (in shares) | shares | (18,072) | |
Ending balance (in shares) | shares | 12,000,380 | 14,545,239 |
Options exercisable (in shares) | shares | 11,234,842 | |
Options vested and expected to vest (in shares) | shares | 11,940,890 | |
Weighted-Average Exercise Price | ||
Beginning balance (in USD per share) | $ / shares | $ 12.86 | |
Granted (in USD per share) | $ / shares | 0 | |
Exercised (in USD per share) | $ / shares | 11.59 | |
Expired (in USD per share) | $ / shares | 2.50 | |
Forfeited (in USD per share) | $ / shares | 15.05 | |
Ending balance (in USD per share) | $ / shares | 13.13 | $ 12.86 |
Option exercisable - Weighted Average Exercise Price (in USD per share) | $ / shares | 13.06 | |
Options vested and expected to vest - Weighted Average Exercise Price (in USD per share) | $ / shares | $ 13.12 | |
Additional Information | ||
Weighted-Average Remaining Contractual Term | 4 years 10 months 24 days | 5 years 1 month 6 days |
Option exercisable - Weighted Average Remaining Contractual Term | 4 years 8 months 12 days | |
Options vested and expected to vest - Weighted Average Remaining Contractual Term | 4 years 10 months 24 days | |
Aggregate Intrinsic Value | $ | $ 174,640 | $ 282,141 |
Options exercisable - Average Intrinsic Value | $ | 164,249 | |
Options vested and expected to vest - Average Intrinsic Value | $ | $ 173,829 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted stock units $ / shares in Units, $ in Thousands | 6 Months Ended |
Apr. 02, 2022USD ($)$ / sharesshares | |
Number of Units | |
Outstanding, beginning balance (in shares) | shares | 9,283,525 |
Granted (in shares) | shares | 2,958,133 |
Released (in shares) | shares | (2,004,895) |
Forfeited (in shares) | shares | (512,347) |
Outstanding, ending balance (in shares) | shares | 9,724,416 |
Units expected to vest (in shares) | shares | 8,328,841 |
Weighted-Average Grant Date Fair Value | |
Outstanding, beginning balance (in USD per share) | $ / shares | $ 12.64 |
Granted (in USD per share) | $ / shares | 32.04 |
Released (in USD per share) | $ / shares | 13.47 |
Forfeited (in USD per share) | $ / shares | 17.55 |
Outstanding, ending balance (in USD per share) | $ / shares | 18.11 |
Vested and expected to vest - Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 17.73 |
Additional Information | |
Aggregate Intrinsic Value, beginning balance | $ | $ 299,487 |
Aggregate Intrinsic Value, ending balance | $ | 269,172 |
Vested and expected to vest - Weighted Average Intrinsic Value | $ | $ 230,542 |
Stock-based Compensation - Perf
Stock-based Compensation - Performance Stock Unit Activity (Details) - Performance Share Units $ / shares in Units, $ in Thousands | 6 Months Ended |
Apr. 02, 2022USD ($)$ / sharesshares | |
Number of Units | |
Outstanding, beginning balance (in shares) | shares | 158,521 |
Granted (in shares) | shares | 252,296 |
Vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | 0 |
Outstanding, ending balance (in shares) | shares | 410,817 |
Weighted-Average Grant Date Fair Value | |
Outstanding, beginning balance (in USD per share) | $ / shares | $ 22.81 |
Granted (in USD per share) | $ / shares | 29.71 |
Vested (in USD per share) | $ / shares | 0 |
Forfeited (in USD per share) | $ / shares | 0 |
Outstanding, ending balance (in USD per share) | $ / shares | $ 27.05 |
Additional Information | |
Aggregate Intrinsic Value, beginning balance | $ | $ 5,114 |
Aggregate Intrinsic Value, ending balance | $ | $ 11,371 |
Stock-based Compensation - St_2
Stock-based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2022 | Apr. 03, 2021 | Apr. 02, 2022 | Apr. 03, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 21,225 | $ 16,363 | $ 38,684 | $ 31,207 |
Cost of revenue | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 377 | 261 | 705 | 474 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 8,091 | 6,683 | 14,829 | 12,942 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 4,177 | 3,632 | 7,824 | 7,040 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 8,580 | $ 5,787 | $ 15,326 | $ 10,751 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2022 | Apr. 03, 2021 | Apr. 02, 2022 | Apr. 03, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Provision for (benefit from) income taxes | $ (772) | $ (6,542) | $ 6,874 | $ 2,578 |
Net Income Per Share Attribut_3
Net Income Per Share Attributable to Common Stockholders - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Apr. 02, 2022 | Jan. 01, 2022 | Apr. 03, 2021 | Jan. 02, 2021 | Apr. 02, 2022 | Apr. 03, 2021 | |
Numerator: | ||||||
Net income (loss) | $ 8,566 | $ 123,481 | $ 17,221 | $ 132,292 | $ 132,047 | $ 149,513 |
Denominator: | ||||||
Weighted-average shares of common stock - basic (in shares) | 128,112,234 | 121,880,615 | 127,887,530 | 118,745,569 | ||
Weighted-average shares of common stock - diluted (in shares) | 139,642,570 | 143,055,546 | 140,982,509 | 136,849,846 | ||
Net income attributable to common stockholders: | ||||||
Net income per share attributable to common stockholders - basic (in USD per share) | $ 0.07 | $ 0.14 | $ 1.03 | $ 1.26 | ||
Net income per share attributable to common stockholders - diluted (in USD per share) | $ 0.06 | $ 0.12 | $ 0.94 | $ 1.09 | ||
Stock Options | ||||||
Denominator: | ||||||
Effect of potentially dilutive stock options, RSUs, and PSUs (in shares) | 6,367,917 | 12,040,149 | 7,265,077 | 10,073,032 | ||
Restricted stock units | ||||||
Denominator: | ||||||
Effect of potentially dilutive stock options, RSUs, and PSUs (in shares) | 4,976,580 | 9,105,551 | 5,641,563 | 8,016,629 | ||
Performance Share Units | ||||||
Denominator: | ||||||
Effect of potentially dilutive stock options, RSUs, and PSUs (in shares) | 185,839 | 29,231 | 188,339 | 14,616 |
Net Income Per Share Attribut_4
Net Income Per Share Attributable to Common Stockholders - Antidilutive Securities (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2022 | Apr. 03, 2021 | Apr. 02, 2022 | Apr. 03, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially antidilutive securities (in shares) | 10,787,394 | 16,675,876 | ||
Stock options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially antidilutive securities (in shares) | 7,523,579 | 12,299,023 | ||
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially antidilutive securities (in shares) | 3,219,598 | 4,354,744 | ||
Performance stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially antidilutive securities (in shares) | 44,217 | 22,109 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 02, 2022 | Apr. 03, 2021 | Apr. 02, 2022 | Apr. 03, 2021 | |
Retirement Benefits [Abstract] | ||||
Employer contribution | $ 2.1 | $ 1.8 | $ 4 | $ 3.5 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Thousands | 3 Months Ended | ||
Jan. 01, 2022USD ($)Acquisition | Apr. 02, 2022USD ($) | Oct. 02, 2021USD ($) | |
Business Acquisition [Line Items] | |||
Goodwill | $ 37,726 | $ 15,545 | |
Series of Individually Immaterial Business Acquisitions | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 27,100 | ||
Number of acquisitions | Acquisition | 2 | ||
Net assets acquired, excluding goodwill | $ 200 | ||
Intangible assets | 6,200 | ||
Deferred tax liabilities | 1,500 | ||
Goodwill | $ 22,200 |
Subsequent Event - (Additional
Subsequent Event - (Additional Information) (Details) - USD ($) $ in Thousands | Apr. 08, 2022 | Apr. 02, 2022 | Apr. 03, 2021 |
Subsequent Event [Line Items] | |||
Business acquisition, net of cash acquired | $ 27,101 | $ 0 | |
Subsequent Event [Member] | Mayht Holding BV [Member] | |||
Subsequent Event [Line Items] | |||
Percentage of ownership control | 100.00% | ||
Business acquisition, net of cash acquired | $ 100,000 |