Sonos (SONO) 10-Q 11 Sep 18 2018 Q3 Quarterly report Financial data

DEI Document

DEI Document - shares	9 Months Ended
	Jun. 30, 2018	Aug. 31, 2018
Document Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Entity Registrant Name	Sonos Inc
Entity Central Index Key	1,314,727
Current Fiscal Year End Date	--06-30
Entity Filer Category	Non-accelerated Filer
Entity common stock, shares outstanding		100,032,880

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017
Current assets:
Cash and cash equivalents	$ 124,432	$ 130,595
Restricted cash	191	193
Accounts receivable, net of allowances	53,095	47,363
Inventories	113,411	113,856
Other current assets	13,852	9,462
Total current assets	304,981	301,469
Property and equipment, net	89,600	95,130
Deferred tax assets	982	1,107
Other noncurrent assets	5,782	2,314
Total assets	401,345	400,020
Current liabilities:
Accounts payable	117,222	114,494
Accrued expenses	29,600	57,348
Accrued compensation	27,605	32,007
Deferred revenue	17,248	10,920
Other current liabilities	9,346	8,497
Total current liabilities	201,021	223,266
Long-term debt	39,686	39,600
Deferred revenue	38,546	34,647
Other noncurrent liabilities	10,851	12,139
Total liabilities	290,104	309,652
Commitments and contingencies (Note 11)
Redeemable convertible preferred stock, $0.001 par value	90,341	90,341
Stockholders’ equity:
Common stock, $0.001 par value	61	59
Treasury stock	(11,072)	(10,161)
Additional paid-in capital	235,444	200,301
Accumulated deficit	(201,891)	(188,007)
Accumulated other comprehensive loss	(1,642)	(2,165)
Total stockholders’ equity	20,900	27
Total liabilities, redeemable convertible preferred stock and stockholders’ equity	$ 401,345	$ 400,020

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2018	Sep. 30, 2017
Statement of Financial Position [Abstract]
Redeemable convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jul. 01, 2017	Jun. 30, 2018	Jul. 01, 2017
Income Statement [Abstract]
Revenue	$ 208,398	$ 223,078	$ 864,069	$ 778,431
Cost of revenue	112,909	115,790	491,037	425,257
Gross profit	95,489	107,288	373,032	353,174
Operating expenses
Research and development	35,444	33,347	104,209	90,920
Sales and marketing	60,819	70,074	214,077	207,225
General and administrative	20,860	20,000	63,822	55,031
Total operating expenses	117,123	123,421	382,108	353,176
Operating loss	(21,634)	(16,133)	(9,076)	(2)
Other income (expense), net
Interest expense, net	(1,116)	(1,185)	(3,367)	(3,187)
Other income (expense), net	(3,744)	2,975	(315)	2,047
Total other income (expense), net	(4,860)	1,790	(3,682)	(1,140)
Loss before provision for (benefit from) income taxes	(26,494)	(14,343)	(12,758)	(1,142)
Provision for (benefit from) income taxes	494	196	1,126	(1,830)
Net income (loss)	(26,988)	(14,539)	(13,884)	688
Net loss attributable to common stockholders	$ (26,988)	$ (14,539)	$ (13,884)	$ 0
Net loss per share attributable to common stockholders:
Basic and diluted (in USD per share)	$ (0.45)	$ (0.26)	$ (0.23)	$ 0
Weighted-average shares used in computing net loss per share attributable to common stockholders:
Weighted-average shares used in computing net loss per share attributable to common stockholders - basic and diluted (in shares)	60,074,763	56,334,641	59,484,761	55,776,325
Total comprehensive loss
Net income (loss)	$ (26,988)	$ (14,539)	$ (13,884)	$ 688
Change in foreign currency translation adjustment, net of tax	162	(406)	523	(2,295)
Comprehensive loss	$ (26,826)	$ (14,945)	$ (13,361)	$ (1,607)

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY - 9 months ended Jun. 30, 2018 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Treasury Stock	Accumulated Deficit	Accumulated Other Comprehensive Loss
Redeemable Convertible Preferred Stock, beginning balance (in shares) at Sep. 30, 2017	32,482,590
Redeemable Convertible Preferred Stock, beginning balance at Sep. 30, 2017	$ 90,341
Redeemable Convertible Preferred Stock, ending balance (in shares) at Jun. 30, 2018	32,482,590
Redeemable Convertible Preferred Stock, ending balance at Jun. 30, 2018	$ 90,341
Balances, beginning of period at Sep. 30, 2017		59,339,336		(746,462)
Balances, beginning of period (in shares) at Sep. 30, 2017	$ 27	$ 59	$ 200,301	$ (10,161)	$ (188,007)	$ (2,165)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options (in shares)	1,735,750	1,735,750
Exercise of stock options	$ 5,748	$ 2	5,746
Repurchase of common stock (in shares)				(60,578)
Repurchase of common stock	(911)			$ (911)
Stock-based compensation expense	29,397		29,397
Net income (loss)	(13,884)				(13,884)
Change in foreign currency translation adjustment	523					523
Balances, ending of period at Jun. 30, 2018		61,075,086		(807,040)
Balances, ending of period (in shares) at Jun. 30, 2018	$ 20,900	$ 61	$ 235,444	$ (11,072)	$ (201,891)	$ (1,642)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2018	Jul. 01, 2017
Cash flows from operating activities
Net income (loss)	$ (13,884)	$ 688
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	28,647	24,447
Stock-based compensation expense	29,397	26,961
Other	639	493
Deferred income taxes	117	1,593
Foreign currency transaction (gain) loss	301	(2,499)
Changes in operating assets and liabilities:
Accounts receivable, net	(5,659)	(6,973)
Inventories, net	(79)	14,202
Other assets	(4,901)	335
Accounts payable and accrued expenses	(24,357)	(20,702)
Accrued compensation	(4,237)	554
Deferred revenue	10,342	6,636
Other liabilities	(534)	181
Net cash provided by operating activities	15,792	45,916
Cash flows from investing activities
Purchases of property and equipment	(25,927)	(21,073)
Net cash used in investing activities	(25,927)	(21,073)
Cash flows from financing activities
Proceeds from credit facilities and issuance of debt, net of issuance costs	30,000	14,987
Payments of principal on credit facilities	(30,000)	0
Proceeds from issuance of common stock, net of issuance costs	0	10,078
Repurchase of common stock	(911)	(10,016)
Proceeds from exercise of common stock options	5,748	5,421
Payments of offering costs	(2,154)	0
Net cash provided by financing activities	2,683	20,470
Effect of exchange rate changes on cash and cash equivalents	1,289	955
Net increase (decrease) in cash and cash equivalents	(6,163)	46,268
Cash and cash equivalents
Beginning of period	130,595	74,913
End of period	124,432	121,181
Supplemental disclosure
Cash paid for interest	3,596	3,006
Cash paid for taxes, net of refunds	1,251	268
Supplemental disclosure of non-cash investing and financing activities
Purchases of property and equipment in accounts payable and accrued expenses	7,187	10,732
Deferred offering costs in accounts payable and accrued expenses	$ 972	$ 0

Business overview and basis of

Business overview and basis of presentation	9 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business overview and basis of presentation	Business overview and basis of presentation Description of business Sonos, Inc. (collectively with its wholly owned subsidiaries, “Sonos,” the “Company,” “we,” “us,” or “our”) designs, develops, manufactures and sells multi-room audio products primarily for use in private residences. The Sonos home 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 throughout the home over the customer’s wireless network. The Company’s products are sold through third-party retail stores, including custom installers of home audio systems. The Company also sells through 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., Beijing Sonos Technology Co., Ltd. and Sonos Australia Pty Ltd., located in the Netherlands, China and Australia, respectively. Initial public offering On August 6, 2018 , the Company completed its initial public offering (the "IPO") of its common stock, in which it sold 6,388,888 shares of its common stock, including 833,333 shares of its common stock pursuant to the underwriters’ over-allotment option, and selling stockholders sold 9,583,333 shares of the Company's common stock, including 1,250,000 shares pursuant to the underwriters' over-allotment option. The shares were sold at the IPO price of $15.00 per share for net proceeds of $90.6 million, after deducting underwriting discounts and commissions of $5.3 million. Additionally, offering costs incurred by the Company are expected to total approximately $4.6 million. Upon the closing of the IPO, all outstanding shares of the Company's redeemable convertible preferred stock automatically converted into 32,482,590 shares of common stock on a one -for-one basis. Basis of presentation and preparation The accompanying condensed consolidated financial statements are unaudited. The condensed consolidated balance sheet as of September 30, 2017 has been derived from the audited financial statements of the Company. The accompanying condensed 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 in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations and cash flows for the interim periods presented. The results of operations for the three and nine months ended June 30, 2018 are not necessarily indicative of the results to be expected for the full fiscal year or any other period. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the "Securities Act"), with the Securities and Exchange Commission (“SEC”) on August 2, 2018 (the "Final Prospectus"). The Company has a 4-4-5 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 months followed by a 5-week “month.” 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, 2015. The nine months ended June 30, 2018 and July 1, 2017 spanned 39 weeks each. Stock split On July 19, 2018, the Company effected a two -for-one stock split of all outstanding shares of the Company’s capital stock, including its common stock and its redeemable convertible preferred stock. All share and per share information presented in the condensed consolidated financial statements has been retroactively adjusted for all periods presented for the effects of the stock split. 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.

Summary of significant accounti

Summary of significant accounting policies	9 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Summary of significant accounting policies	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 Final Prospectus, except as noted below. Recently adopted accounting pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (the "FASB") issued a new standard related to revenue recognition, Accounting Standards Codification (“ASC”) No. 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 is required to be adopted for annual reporting periods beginning after December 15, 2017, including interim periods therein, and may be earlier adopted, though no earlier than for annual reporting periods beginning after December 15, 2016. The Company elected to early adopt ASC 606 effective October 1, 2017, using the full retrospective transition method, which required the Company to adjust each prior reporting period presented. The most significant impact of the adoption of this standard related to the Company’s accounting for arrangements with certain distributors and retail partners with implicit or explicit return rights that were recognized based on a sell-through method under ASC 605, Revenue Recognition. Under ASC 606, revenue with these parties is recognized upon transfer of control to the customer which occurs when the product is either shipped to or delivered to the customer depending on the contractual terms of the arrangement. This change resulted in an acceleration of revenue and related costs of revenue and most significantly, a reduction in deferred costs of revenue and deferred revenue at each balance sheet date. This acceleration of revenue can have a net increase or decrease in the adjusted revenue for the respective fiscal year depending on the year over year impact of the amounts accelerated across reporting periods. The Company has not previously reported its financial statements for fiscal 2017 under ASC 605 and therefore the October 1, 2017 adoption of ASC 606 had no impact on the fiscal 2017 information included in the accompanying condensed consolidated financial statements. Recent accounting pronouncements pending adoption Leases In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (“ASU 2016-02”), which amends a number of aspects of lease accounting, including requiring lessees to recognize operating leases with a term greater than one year on their balance sheet as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which amends ASU 2016-02 to provide an additional transition method option. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the timing of adoption and the impact of adopting ASU 2016-02 on its consolidated financial statements. Disclosure Update and Simplification In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective 30 days after publication in the Federal Register. The final rule was not yet published in the Federal Register as of the date this Quarterly Report on Form 10-Q. The Company is evaluating the impact of this guidance on its consolidated financial statements.

Fair value measurements

Fair value measurements	9 Months Ended
	Jun. 30, 2018
Fair Value Disclosures [Abstract]
Fair value measurements	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 carrying values of the Company’s long-term debt approximate their fair values as of June 30, 2018 and September 30, 2017 as the debt carries a variable rate or market rates that approximate those currently available to the Company. The following table summarizes fair value measurements by level for the assets measured at fair value on a recurring basis as of June 30, 2018 and September 30, 2017 : June 30, 2018 (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 50,362 $ — $ — $ 50,362 September 30, 2017 (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 40,072 $ — $ — $ 40,072

Revenue and geographic informat

Revenue and geographic information	9 Months Ended
	Jun. 30, 2018
Revenue from Contract with Customer [Abstract]
Revenue and geographic information	Revenue and geographic information Disaggregation of revenue Revenue by geographical region includes the applicable service revenue attributable to each region and is based on ship-to address, as follows: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands) Americas $ 122,982 $ 114,707 $ 447,705 $ 388,620 Europe, Middle East and Africa 75,585 95,802 374,790 349,327 Asia Pacific 9,831 12,569 41,574 40,484 Total revenue $ 208,398 $ 223,078 $ 864,069 $ 778,431 Revenue from external customers is attributed to individual countries based on ship-to address and includes the applicable service revenue attributable to each country. Revenue by significant countries is as follows: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands) United States $ 113,558 $ 106,364 $ 409,701 $ 352,194 United Kingdom 17,930 20,500 $ 88,421 88,505 Germany 18,512 25,973 $ 95,720 86,308 Other countries 58,398 70,241 270,227 251,424 Total revenue $ 208,398 $ 223,078 $ 864,069 $ 778,431 Revenue by product categories includes the applicable service revenue attributable to each product category. Revenue by major product category is as follows: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands) Wireless speakers $ 93,867 $ 92,797 $ 453,185 $ 389,300 Home theater speakers 66,732 83,928 283,952 266,972 Components 42,283 44,160 113,530 114,007 Other 5,516 2,193 13,402 8,152 Total revenue $ 208,398 $ 223,078 $ 864,069 $ 778,431

Balance sheet components

Balance sheet components	9 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Balance sheet components	Balance sheet components Inventories Inventories, net, consist of the following: June 30, 2018 September 30, 2017 (In thousands) Finished goods $ 98,565 $ 104,014 Components 14,846 9,842 Inventories $ 113,411 $ 113,856 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. Deferred revenue Amounts invoiced in advance of revenue recognition are recorded as deferred revenue on the condensed consolidated balance sheets. Changes in deferred revenue balances as of June 30, 2018 and July 1, 2017 were as follows: June 30, 2018 July 1, 2017 (In thousands) Deferred revenue, beginning of period $ 45,567 $ 36,160 Recognition of revenue included in beginning of period deferred revenue (8,367 ) (5,171 ) Revenue deferred, net of revenue recognized on contracts in the respective period 18,594 11,817 Deferred revenue, end of period $ 55,794 $ 42,806 As of June 30, 2018 , deferred revenue was $55.8 million. The Company expects to recognize approximately $8.9 million in the remainder of fiscal 2018, $11.0 million in fiscal 2019, $10.3 million in fiscal 2020, $9.0 million in fiscal 2021, $7.2 million in fiscal 2022 and $9.4 million thereafter.

Long-term debt

Long-term debt	9 Months Ended
	Jun. 30, 2018
Debt Disclosure [Abstract]
Long-term debt	Long-term debt JP Morgan credit facility In October 2015, the Company entered into a credit agreement with J.P. Morgan Chase Bank, N.A. (the “Credit Facility”). The Credit Facility allows the Company to borrow up to $80.0 million, including up to a $10.0 million for the issuance of letters of credit and up to $8.0 million for swing line loans. The Credit Facility matures on October 28, 2020 . The Company has the option to repay the borrowings under the Credit Facility without penalty prior to maturity. As of June 30, 2018 and September 30, 2017 the Company was in compliance with all covenants. Obligations under the Credit Facility are collateralized by eligible inventory, accounts receivable and intellectual property of the Company. As of June 30, 2018 and September 30, 2017 the Company did not have any outstanding borrowings under the Credit Facility and had $4.5 million and $4.4 million, respectively, in undrawn letters of credit that reduced the availability under the Credit Facility. The average interest rates were LIBOR +1.25% as of June 30, 2018 and September 30, 2017 . Subsequent to the nine months ended June 30, 2018 , in July 2018, the Company amended its existing 2015 Credit Facility with J.P. Morgan Chase Bank, N.A. to, among other things, extend its term from October 2020 to October 2021 and provide for a $40.0 million term loan, which increased the Company’s borrowing capacity thereunder from $80.0 million to $120.0 million. In connection with the amendment, the Company borrowed $40.0 million under a term loan (the "New Term Loan”), which the Company used to pay off all outstanding borrowings, accrued interest and fees under its then-outstanding term loan, as described below. The New Term Loan has a maturity date of October 2021 and bears interest at a variable rate equal to an adjusted LIBOR plus 2.25% . The Company will make its first principal payment under the New Term Loan in July 2019 and will make quarterly principal payments thereafter. The Company elected to make interest payments on a semi-annual basis. Term loan In March 2016, the Company entered into a $25.0 million, five -year term loan agreement with Gordon Brothers Finance Company (the “Term Loan”). The Term Loan initially bore interest at a variable rate equal to an adjusted LIBOR plus 10.0% , with a minimum rate of 10.5% per annum. In December 2016, the Company amended the Term Loan (the “Amended Term Loan”) and borrowed an additional $15.0 million net of issuance costs, increasing the aggregate principal amount of the loan to $40.0 million, reducing the interest rate to a variable rate equal to an adjusted LIBOR plus 9.5% and changing prepayment penalty terms. The Amended Term Loan bore interest at a variable rate equal to an adjusted LIBOR plus 9.5% , with a minimum rate of 10.0% per annum. The effective interest rate on the Term Loan was 11.48% and 10.74% as of June 30, 2018 and September 30, 2017 , respectively. As of June 30, 2018 and September 30, 2017 , the Company was in compliance with all covenants and the carrying value of the Amended Term Loan was $39.7 million and $39.6 million, respectively, net of unamortized debt discount of $0.3 million and $0.4 million, respectively. Obligations under the Amended Term Loan were collateralized by eligible inventory, accounts receivable and intellectual property of the Company. As described above, in July 2018, the Company terminated its $40.0 million Amended Term Loan with Gordon Brothers Finance Company. In connection with the termination and new borrowings under the New Term Loan, the Company paid off all outstanding borrowings, accrued interest, and fees under the Amended Term Loan.

Redeemable convertible preferre

Redeemable convertible preferred stock	9 Months Ended
	Jul. 01, 2017
Temporary Equity Disclosure [Abstract]
Redeemable convertible preferred stock	Redeemable convertible preferred stock As of June 30, 2018 and September 30, 2017 redeemable convertible preferred stock consisted of the following: (In thousands, except shares) As of June 30, 2018 and September 30, 2017 Authorized Shares Issued and Outstanding Shares Carrying Value Liquidation Preference Series A Preferred Stock 10,035,000 10,005,000 $ 15,060 $ 15,008 Series B Preferred Stock 3,881,250 3,730,000 5,926 5,968 Series C Preferred Stock 11,700,000 11,688,766 26,556 25,000 Series D Preferred Stock 7,058,824 7,058,824 42,799 45,000 Total 32,675,074 32,482,590 $ 90,341 $ 90,976 Upon the closing of the IPO, all shares of the Company's outstanding redeemable convertible preferred stock automatically converted on a one -for-one basis into an aggregate of 32,482,590 shares of common stock.

Stock option plan and stock-bas

Stock option plan and stock-based compensation	9 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock option plan and stock-based compensation	Stock option plan and stock-based compensation During 2003, the Company’s Board of Directors (the "Board") established the 2003 Stock Plan, as amended (the “2003 Plan”). As of June 30, 2018 , there were 89,000,000 shares authorized under the 2003 Plan and 1,799,258 shares were reserved for future issuance. As of September 30, 2017 , there were 85,000,000 shares authorized under the 2003 Plan, and 2,088,004 shares were reserved for future issuance. The 2003 Plan includes incentive stock options that are subject to the rules and regulations of the Internal Revenue Code of 1986, as amended (the "Code"), and nonqualified stock options. The option price, number of shares and grant date are determined at the discretion of the Board. As long as the optionholder performs services for the Company, the options generally vest over 48 months , with cliff vesting after one year and monthly vesting thereafter. All options are exercisable for a period not to exceed ten years from the date of grant. In July 2018, the Board adopted the 2018 Equity Incentive Plan (the "2018 Plan") and ceased granting awards under the 2003 Plan. The 2018 Plan became effective in connection with the IPO. The Company reserved 21,200,000 shares of its common stock for issuance under the 2018 Plan. Any remaining shares available for issuance under the 2003 Stock Plan on the effective date of the 2018 Plan were added to the shares of common stock reserved for issuance under the 2018 Plan. Stock option activity was as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Weighted Average Intrinsic Value (in years) (in thousands) Outstanding at September 30, 2017 45,817,252 $ 9.20 6.9 $ 199,663 Granted 7,676,414 $ 15.09 Exercised (1,735,750 ) $ 3.31 Forfeited (3,387,668 ) $ 13.05 Outstanding at June 30, 2018 48,370,248 $ 10.08 6.7 $ 243,060 At June 30, 2018 Options exercisable 30,582,952 $ 7.70 5.4 $ 226,453 Options vested and expected to vest 45,413,361 $ 9.80 6.6 $ 240,964 As of June 30, 2018 and September 30, 2017 , the Company had $73.5 million and $74.9 million, respectively, of unrecognized stock-based compensation expense which is expected to be recognized over a weighted-average period of 2.7 and 2.8 years, respectively. The Company’s policy for issuing stock upon stock option exercise is to issue new common stock. Total stock-based compensation expense by function category was as follows: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands) Cost of revenue $ 49 $ 65 $ 156 $ 179 Research and development 3,651 3,529 10,417 10,136 Sales and marketing 4,391 3,899 12,414 11,172 General and administrative 2,242 2,045 6,410 5,474 Total stock-based compensation expense $ 10,333 $ 9,538 $ 29,397 $ 26,961

Income taxes

Income taxes	9 Months Ended
	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income taxes	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, 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 particular 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 annual effective tax rate, and if the estimated annual tax rate changes, a cumulative adjustment is made in that quarter. The Company had an income tax expense of $0.5 million and $0.2 million for the three months ended June 30, 2018 and July 1, 2017, respectively, and an income tax expense of $1.1 million and an income tax benefit of $1.8 million for the nine months ended June 30, 2018 and July 1, 2017, respectively. In fiscal 2017, the Company amended a tax audit settlement agreement with the Dutch Tax Administration, which, among other things, resulted in a release of previously accrued tax liabilities for Sonos Europe B.V. that was partially offset by the establishment of a valuation allowance based on cumulative losses, resulting in a net tax benefit in the first nine months of fiscal 2017. Tax Act On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (the "Tax Act") into law, implementing a wide variety of changes to the U.S. tax system. Among other changes at the corporate level, the Tax Act includes (i) a reduction in the U.S. federal corporate income tax rate from 35% to 21%, (ii) further limitations on the deductibility of interest expense and certain executive compensation, (iii) the repeal of the corporate alternative minimum tax, (iv) the imposition of a territorial tax system with a one-time repatriation tax on deemed repatriated earnings of foreign subsidiaries and (v) subjecting certain foreign earnings to U.S. taxation through a base erosion anti-abuse tax (“BEAT”) and a new tax related to global intangible low taxed income (“GILTI”). Additionally, certain foreign derived intangible income (“FDII”) may prospectively be subject to a reduced rate of income tax from the statutorily enacted rate of 21%. Some of these changes, including the BEAT, FDII and GILTI provisions, will not come into effect until the Company’s 2019 fiscal year, but because the decrease in the corporate income tax rate was effective January 1, 2018, the Company has reduced the future tax benefits of the Company’s existing U.S. deferred tax assets. However, since the Company maintains a full valuation allowance against these assets, it did not have a material impact on the Company’s results of operations or financial condition. The Company has not recorded a provision related to the one-time transition tax under Section 965 of the Code as the Company has estimated that its foreign subsidiaries have a consolidated deficit in accumulated and current earnings and profits. The Company’s accounting for the elements of the Tax Act is incomplete. The Company has made reasonable estimates of the effects to the condensed consolidated statements of operations and comprehensive loss and condensed consolidated balance sheets and have preliminarily determined that a provision is not required. The ultimate impact of the Tax Act may differ from the above estimates due to potential future legislative action to address questions that have arisen because of the Tax Act, issuance of additional guidance by the Internal Revenue Service (the "IRS") to provide clarity on certain provisions of the Tax Act and any changes in accounting standards for income taxes or related interpretations in response to the Tax Act. The SEC has issued rules that allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. The Company currently anticipates finalizing and recording any resulting adjustments by the end of its fiscal quarter ending December 29, 2018.

Net loss per share attributable

Net loss per share attributable to common stockholders	9 Months Ended
	Jun. 30, 2018
Earnings Per Share [Abstract]
Net loss per share attributable to common stockholders	Net loss per share attributable to common stockholders Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers its redeemable convertible preferred stock to be participating securities as the holders of redeemable convertible preferred stock are entitled to receive noncumulative dividends in the event that a dividend is paid on common stock. The holders of redeemable convertible preferred stock and the holders of non-vested restricted stock do not have a contractual obligation to share in the losses of the Company. Basic net loss attributable to common stockholders per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding less shares subject to repurchase. Diluted net loss per share attributable to common stockholders adjusts the basic net loss per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potentially dilutive impact of stock options and restricted stock, using the treasury stock method, and convertible preferred stock using the as-if-converted method. The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands, except per share data) Numerator: Net income (loss) $ (26,988 ) $ (14,539 ) $ (13,884 ) $ 688 Less: earnings attributable to preferred stockholders — — — (688 ) Net loss attributable to common stockholders—basic and diluted (26,988 ) (14,539 ) (13,884 ) — Denominator: Weighted-average shares of common stock—basic and diluted 60,074,763 56,334,641 59,484,761 55,776,325 Net loss per share attributable to common stockholders: Net loss per share attributable to common stockholders—basic and diluted $ (0.45 ) $ (0.26 ) $ (0.23 ) $ — The following potentially dilutive shares were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Stock options to purchase common stock 48,370,248 48,554,772 48,370,248 48,554,772 Convertible preferred stock 32,482,590 32,482,590 32,482,590 32,482,590 Shares subject to repurchase 53,892 53,892 53,892 53,892 Total 80,906,730 81,091,254 80,906,730 81,091,254

Commitments and contingencies

Commitments and contingencies	9 Months Ended
	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and contingencies	Commitments and contingencies Inventory The Company enters into various inventory-related purchase agreements with suppliers. Generally, under these agreements, 100% of orders are cancelable by giving notice 29 days prior to the expected shipment date. Orders are non-cancelable within 28 days prior to the expected shipment date. At June 30, 2018 , the Company had $40.9 million in non-cancelable purchase commitments with inventory suppliers. The remaining minimum total purchase commitments under the agreements with these suppliers at June 30, 2018 was $38.9 million for the remainder of fiscal 2018 and $2.0 million in fiscal 2019 . 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 October 21, 2014, the Company commenced a patent infringement action in the United States District Court, District of Delaware against D&M Holdings Inc. d/b/a The D+M Group, D&M Holdings U.S. Inc. and Denon Electronics (USA), LLC (collectively, “Denon”). On May 18, 2018, the Company entered into a patent covenant agreement with Denon, effective May 17, 2018, with a term lasting through May 22, 2022. Under the agreement, Denon will make royalty payments over the nine months following the effective date, covering both historical sales and sales throughout the term, at an effective royalty rate materially consistent with the December 14, 2017 jury verdict. Pursuant to the agreement, all claims asserted in the Company’s patent infringement claim against Denon and in Denon’s countersuit against the Company were dismissed with prejudice and the parties released claims of any past infringement of the patents asserted in the litigation between the Company and Denon and any patents related thereto. 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 June 30, 2018 and September 30, 2017. The Company is involved in certain other litigation matters not listed above but does not consider the 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.

Subsequent events

Subsequent events	9 Months Ended
	Jun. 30, 2018
Subsequent Events [Abstract]
Subsequent events	Subsequent events On August 6, 2018 , the Company completed the IPO of its common stock (see Note 1). Upon the closing of the IPO, all outstanding shares of the Company's redeemable convertible preferred stock automatically converted into 32,482,590 shares of common stock on a one -for-one basis. In July 2018 the Board adopted the 2018 Plan and ceased granting awards under the 2003 Plan (see Note 8). In July 2018, the Company amended its existing Credit Facility with J.P. Morgan Chase Bank, N.A. to, among other things, extend its term from October 2020 to October 2021 and provide for a $40.0 million term loan. At the same time, in July 2018, the Company terminated the Amended Term Loan with Gordon Brothers Finance Company and paid off all outstanding borrowings, accrued interest and fees thereunder (see Note 6). On July 19, 2018, the Company effected a two -for-one stock split of all outstanding shares of the Company’s capital stock, including its common stock and its redeemable convertible preferred stock (see Note 1).

Summary of significant accoun19

Summary of significant accounting policies (Policies)	9 Months Ended
	Jun. 30, 2018
Accounting Policies [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 September 30, 2017 has been derived from the audited financial statements of the Company. The accompanying condensed 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 in management’s opinion, includes all adjustments, consisting of only normal recurring adjustments, necessary for the fair statement of the Company’s financial position, its results of operations and cash flows for the interim periods presented. The results of operations for the three and nine months ended June 30, 2018 are not necessarily indicative of the results to be expected for the full fiscal year or any other period. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the "Securities Act"), with the Securities and Exchange Commission (“SEC”) on August 2, 2018 (the "Final Prospectus"). The Company has a 4-4-5 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 months followed by a 5-week “month.” 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, 2015. The nine months ended June 30, 2018 and July 1, 2017 spanned 39 weeks each.
Use of estimates and judgments	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.
Recently adopted accounting pronouncements and recent accounting pronouncements pending adoption	Recently adopted accounting pronouncements Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (the "FASB") issued a new standard related to revenue recognition, Accounting Standards Codification (“ASC”) No. 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 is required to be adopted for annual reporting periods beginning after December 15, 2017, including interim periods therein, and may be earlier adopted, though no earlier than for annual reporting periods beginning after December 15, 2016. The Company elected to early adopt ASC 606 effective October 1, 2017, using the full retrospective transition method, which required the Company to adjust each prior reporting period presented. The most significant impact of the adoption of this standard related to the Company’s accounting for arrangements with certain distributors and retail partners with implicit or explicit return rights that were recognized based on a sell-through method under ASC 605, Revenue Recognition. Under ASC 606, revenue with these parties is recognized upon transfer of control to the customer which occurs when the product is either shipped to or delivered to the customer depending on the contractual terms of the arrangement. This change resulted in an acceleration of revenue and related costs of revenue and most significantly, a reduction in deferred costs of revenue and deferred revenue at each balance sheet date. This acceleration of revenue can have a net increase or decrease in the adjusted revenue for the respective fiscal year depending on the year over year impact of the amounts accelerated across reporting periods. The Company has not previously reported its financial statements for fiscal 2017 under ASC 605 and therefore the October 1, 2017 adoption of ASC 606 had no impact on the fiscal 2017 information included in the accompanying condensed consolidated financial statements. Recent accounting pronouncements pending adoption Leases In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842) (“ASU 2016-02”), which amends a number of aspects of lease accounting, including requiring lessees to recognize operating leases with a term greater than one year on their balance sheet as a right-of-use asset and corresponding liability, measured at the present value of the lease payments. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which amends ASU 2016-02 to provide an additional transition method option. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the timing of adoption and the impact of adopting ASU 2016-02 on its consolidated financial statements. Disclosure Update and Simplification In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective 30 days after publication in the Federal Register. The final rule was not yet published in the Federal Register as of the date this Quarterly Report on Form 10-Q. The Company is evaluating the impact of this guidance on its consolidated financial statements.

Fair value measurements (Tables

Fair value measurements (Tables)	9 Months Ended
	Jun. 30, 2018
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 June 30, 2018 and September 30, 2017 : June 30, 2018 (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 50,362 $ — $ — $ 50,362 September 30, 2017 (In thousands) Level 1 Level 2 Level 3 Total Assets: Money market funds (cash equivalents) $ 40,072 $ — $ — $ 40,072

Revenue and geographic inform21

Revenue and geographic information (Tables)	9 Months Ended
	Jun. 30, 2018
Revenue from Contract with Customer [Abstract]
Disaggregation of revenue	Disaggregation of revenue Revenue by geographical region includes the applicable service revenue attributable to each region and is based on ship-to address, as follows: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands) Americas $ 122,982 $ 114,707 $ 447,705 $ 388,620 Europe, Middle East and Africa 75,585 95,802 374,790 349,327 Asia Pacific 9,831 12,569 41,574 40,484 Total revenue $ 208,398 $ 223,078 $ 864,069 $ 778,431 Revenue from external customers is attributed to individual countries based on ship-to address and includes the applicable service revenue attributable to each country. Revenue by significant countries is as follows: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands) United States $ 113,558 $ 106,364 $ 409,701 $ 352,194 United Kingdom 17,930 20,500 $ 88,421 88,505 Germany 18,512 25,973 $ 95,720 86,308 Other countries 58,398 70,241 270,227 251,424 Total revenue $ 208,398 $ 223,078 $ 864,069 $ 778,431 Revenue by product categories includes the applicable service revenue attributable to each product category. Revenue by major product category is as follows: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands) Wireless speakers $ 93,867 $ 92,797 $ 453,185 $ 389,300 Home theater speakers 66,732 83,928 283,952 266,972 Components 42,283 44,160 113,530 114,007 Other 5,516 2,193 13,402 8,152 Total revenue $ 208,398 $ 223,078 $ 864,069 $ 778,431

Balance sheet components (Table

Balance sheet components (Tables)	9 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of inventories, net	Inventories, net, consist of the following: June 30, 2018 September 30, 2017 (In thousands) Finished goods $ 98,565 $ 104,014 Components 14,846 9,842 Inventories $ 113,411 $ 113,856
Changes in deferred balances	Changes in deferred revenue balances as of June 30, 2018 and July 1, 2017 were as follows: June 30, 2018 July 1, 2017 (In thousands) Deferred revenue, beginning of period $ 45,567 $ 36,160 Recognition of revenue included in beginning of period deferred revenue (8,367 ) (5,171 ) Revenue deferred, net of revenue recognized on contracts in the respective period 18,594 11,817 Deferred revenue, end of period $ 55,794 $ 42,806

Redeemable convertible prefer23

Redeemable convertible preferred stock (Tables)	9 Months Ended
	Jul. 01, 2017
Temporary Equity Disclosure [Abstract]
Schedule of redeemable convertible preferred stock	As of June 30, 2018 and September 30, 2017 redeemable convertible preferred stock consisted of the following: (In thousands, except shares) As of June 30, 2018 and September 30, 2017 Authorized Shares Issued and Outstanding Shares Carrying Value Liquidation Preference Series A Preferred Stock 10,035,000 10,005,000 $ 15,060 $ 15,008 Series B Preferred Stock 3,881,250 3,730,000 5,926 5,968 Series C Preferred Stock 11,700,000 11,688,766 26,556 25,000 Series D Preferred Stock 7,058,824 7,058,824 42,799 45,000 Total 32,675,074 32,482,590 $ 90,341 $ 90,976

Stock option plan and stock-b24

Stock option plan and stock-based compensation (Tables)	9 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Stock Option Activity	Stock option activity was as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Weighted Average Intrinsic Value (in years) (in thousands) Outstanding at September 30, 2017 45,817,252 $ 9.20 6.9 $ 199,663 Granted 7,676,414 $ 15.09 Exercised (1,735,750 ) $ 3.31 Forfeited (3,387,668 ) $ 13.05 Outstanding at June 30, 2018 48,370,248 $ 10.08 6.7 $ 243,060 At June 30, 2018 Options exercisable 30,582,952 $ 7.70 5.4 $ 226,453 Options vested and expected to vest 45,413,361 $ 9.80 6.6 $ 240,964
Schedule of Stock-based Compensation Expense	Total stock-based compensation expense by function category was as follows: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands) Cost of revenue $ 49 $ 65 $ 156 $ 179 Research and development 3,651 3,529 10,417 10,136 Sales and marketing 4,391 3,899 12,414 11,172 General and administrative 2,242 2,045 6,410 5,474 Total stock-based compensation expense $ 10,333 $ 9,538 $ 29,397 $ 26,961

Net loss per share attributab25

Net loss per share attributable to common stockholders (Tables)	9 Months Ended
	Jun. 30, 2018
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic	The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands, except per share data) Numerator: Net income (loss) $ (26,988 ) $ (14,539 ) $ (13,884 ) $ 688 Less: earnings attributable to preferred stockholders — — — (688 ) Net loss attributable to common stockholders—basic and diluted (26,988 ) (14,539 ) (13,884 ) — Denominator: Weighted-average shares of common stock—basic and diluted 60,074,763 56,334,641 59,484,761 55,776,325 Net loss per share attributable to common stockholders: Net loss per share attributable to common stockholders—basic and diluted $ (0.45 ) $ (0.26 ) $ (0.23 ) $ —
Schedule of Earnings Per Share, Diluted	The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 (In thousands, except per share data) Numerator: Net income (loss) $ (26,988 ) $ (14,539 ) $ (13,884 ) $ 688 Less: earnings attributable to preferred stockholders — — — (688 ) Net loss attributable to common stockholders—basic and diluted (26,988 ) (14,539 ) (13,884 ) — Denominator: Weighted-average shares of common stock—basic and diluted 60,074,763 56,334,641 59,484,761 55,776,325 Net loss per share attributable to common stockholders: Net loss per share attributable to common stockholders—basic and diluted $ (0.45 ) $ (0.26 ) $ (0.23 ) $ —
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	The following potentially dilutive shares were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive: Three Months Ended Nine Months Ended June 30, 2018 July 1, 2017 June 30, 2018 July 1, 2017 Stock options to purchase common stock 48,370,248 48,554,772 48,370,248 48,554,772 Convertible preferred stock 32,482,590 32,482,590 32,482,590 32,482,590 Shares subject to repurchase 53,892 53,892 53,892 53,892 Total 80,906,730 81,091,254 80,906,730 81,091,254

Business overview and basis o26

Business overview and basis of presentation (Details) $ / shares in Units, $ in Thousands	Aug. 06, 2018USD ($)$ / sharesshares	Jul. 19, 2018	Jun. 30, 2018USD ($)country	Jul. 01, 2017USD ($)
Class of Stock [Line Items]
Number of countries where products are distributed | country			50
Underwriting discounts and commissions | $			$ 2,154	$ 0
Subsequent Event
Class of Stock [Line Items]
Common shares issued in conversion of outstanding shares of redeemable convertible preferred stock (shares)	32,482,590
Number of shares of common stock issued for each share of redeemable convertible preferred stock (shares)	1
Stock split, conversion ratio		2
IPO | Subsequent Event
Class of Stock [Line Items]
Shares sold in IPO (shares)	6,388,888
Public offering price (in USD per share) | $ / shares	$ 15
Net proceeds from IPO | $	$ 90,600
Underwriting discounts and commissions | $	5,300
Offering costs | $	$ 4,600
Over-Allotment Option | Subsequent Event
Class of Stock [Line Items]
Shares sold in IPO (shares)	833,333
Initial Public Offering - Shares From Existing Shareholders | Subsequent Event
Class of Stock [Line Items]
Shares sold in IPO (shares)	9,583,333
Over-Allotment Option - Shares From Existing Shareholders | Subsequent Event
Class of Stock [Line Items]
Shares sold in IPO (shares)	1,250,000

Fair value measurements (Detail

Fair value measurements (Details) - Money market funds - Fair value, measurements, recurring - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017
Assets:
Money market funds (cash equivalents)	$ 50,362	$ 40,072
Level 1
Assets:
Money market funds (cash equivalents)	50,362	40,072
Level 2
Assets:
Money market funds (cash equivalents)	0	0
Level 3
Assets:
Money market funds (cash equivalents)	$ 0	$ 0

Revenue and geographic inform28

Revenue and geographic information - Disaggregation of revenues (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jul. 01, 2017	Jun. 30, 2018	Jul. 01, 2017
Disaggregation of Revenue [Line Items]
Revenue	$ 208,398	$ 223,078	$ 864,069	$ 778,431
Wireless speakers
Disaggregation of Revenue [Line Items]
Revenue	93,867	92,797	453,185	389,300
Home theater speakers
Disaggregation of Revenue [Line Items]
Revenue	66,732	83,928	283,952	266,972
Components
Disaggregation of Revenue [Line Items]
Revenue	42,283	44,160	113,530	114,007
Other
Disaggregation of Revenue [Line Items]
Revenue	5,516	2,193	13,402	8,152
Americas
Disaggregation of Revenue [Line Items]
Revenue	122,982	114,707	447,705	388,620
Europe, Middle East and Africa
Disaggregation of Revenue [Line Items]
Revenue	75,585	95,802	374,790	349,327
Asia Pacific
Disaggregation of Revenue [Line Items]
Revenue	9,831	12,569	41,574	40,484
United States
Disaggregation of Revenue [Line Items]
Revenue	113,558	106,364	409,701	352,194
United Kingdom
Disaggregation of Revenue [Line Items]
Revenue	17,930	20,500	88,421	88,505
Germany
Disaggregation of Revenue [Line Items]
Revenue	18,512	25,973	95,720	86,308
Other countries
Disaggregation of Revenue [Line Items]
Revenue	$ 58,398	$ 70,241	$ 270,227	$ 251,424

Balance sheet components - Inve

Balance sheet components - Inventories, net (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Finished goods	$ 98,565	$ 104,014
Components	14,846	9,842
Inventories	$ 113,411	$ 113,856

Balance sheet components - Chan

Balance sheet components - Change in deferred revenue (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2018	Jul. 01, 2017
Contract with Customer, Liability [Roll Forward]
Deferred revenue, beginning of period	$ 45,567	$ 36,160
Recognition of revenue included in beginning of period deferred revenue	(8,367)	(5,171)
Revenue deferred, net of revenue recognized on contracts in the respective period	18,594	11,817
Deferred revenue, end of period	$ 55,794	$ 42,806

Balance sheet components - Narr

Balance sheet components - Narrative (Details) $ in Millions	Jun. 30, 2018USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Deferred revenue expected to be recognized, remainder of fiscal 2018	$ 8.9
Deferred revenue expected to be recognized, fiscal 2019	11
Deferred revenue expected to be recognized, fiscal 2020	10.3
Deferred revenue expected to be recognized, fiscal 2021	9
Deferred revenue expected to be recognized, fiscal 2022	7.2
Deferred revenue expected to be recognized, thereafter	$ 9.4

Long-term debt (Details)

Long-term debt (Details) - USD ($)	1 Months Ended		9 Months Ended	12 Months Ended
	Jul. 31, 2018	Mar. 31, 2016	Jun. 30, 2018	Sep. 30, 2017	Oct. 31, 2015
Debt Instrument [Line Items]
Long-term debt			$ 39,686,000	$ 39,600,000
Debt, unamortized discount			$ 300,000	$ 400,000
Gordon Brothers Finance Company | Term loan
Debt Instrument [Line Items]
Debt instrument, term		5 years
Gordon Brothers Finance Company | Line of credit | Term loan
Debt Instrument [Line Items]
Debt		$ 25,000,000
Debt instrument, minimum interest rate		10.50%
Gordon Brothers Finance Company | Line of credit | Term loan | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt, basis spread on variable rate		10.00%
Gordon Brothers Finance Company | Line of credit | Term loan under Amended Term Loan
Debt Instrument [Line Items]
Debt		$ 15,000,000
Debt instrument, minimum interest rate		10.00%
Debt, interest rate, effective percentage			11.48%	10.74%
Gordon Brothers Finance Company | Line of credit | Term loan under Amended Term Loan | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt, basis spread on variable rate		9.50%
Gordon Brothers Finance Company | Line of credit | Aggregate Term loan
Debt Instrument [Line Items]
Debt		$ 40,000,000
Gordon Brothers Finance Company | Line of credit | Aggregate Term loan | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt, basis spread on variable rate		9.50%
Credit facility | Credit facility | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt, basis spread on variable rate			1.25%	1.25%
Credit facility | J.P. Morgan Chase Bank, N.A. | Line of credit
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 80,000,000
Credit facility			$ 0	$ 0
Letter of credit | J.P. Morgan Chase Bank, N.A. | Line of credit
Debt Instrument [Line Items]
Maximum borrowing capacity					10,000,000
Borrowing capacity			$ 4,500,000	$ 4,400,000
Swing loan | J.P. Morgan Chase Bank, N.A. | Line of credit
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 8,000,000
Subsequent Event | J.P. Morgan Chase Bank, N.A. | Term Loan under Credit Facility
Debt Instrument [Line Items]
Debt	$ 40,000,000
Subsequent Event | J.P. Morgan Chase Bank, N.A. | Line of credit | Term Loan under Credit Facility
Debt Instrument [Line Items]
Debt	$ 40,000,000
Subsequent Event | J.P. Morgan Chase Bank, N.A. | Line of credit | Term Loan under Credit Facility | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt, basis spread on variable rate	2.25%
Subsequent Event | Credit facility | J.P. Morgan Chase Bank, N.A. | Line of credit
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 120,000,000

Redeemable convertible prefer33

Redeemable convertible preferred stock (Details) - USD ($) $ in Thousands	Aug. 06, 2018	Jun. 30, 2018	Sep. 30, 2017
Temporary Equity [Line Items]
Authorized Shares (in shares)		32,675,074	32,675,074
Issued Shares (in shares)		32,482,590	32,482,590
Outstanding Shares (in shares)		32,482,590	32,482,590
Carrying Value		$ 90,341	$ 90,341
Liquidation Preference		$ 90,976	$ 90,976
Series A Preferred Stock
Temporary Equity [Line Items]
Authorized Shares (in shares)		10,035,000	10,035,000
Issued Shares (in shares)		10,005,000	10,005,000
Outstanding Shares (in shares)		10,005,000	10,005,000
Carrying Value		$ 15,060	$ 15,060
Liquidation Preference		$ 15,008	$ 15,008
Series B Preferred Stock
Temporary Equity [Line Items]
Authorized Shares (in shares)		3,881,250	3,881,250
Issued Shares (in shares)		3,730,000	3,730,000
Outstanding Shares (in shares)		3,730,000	3,730,000
Carrying Value		$ 5,926	$ 5,926
Liquidation Preference		$ 5,968	$ 5,968
Series C Preferred Stock
Temporary Equity [Line Items]
Authorized Shares (in shares)		11,700,000	11,700,000
Issued Shares (in shares)		11,688,766	11,688,766
Outstanding Shares (in shares)		11,688,766	11,688,766
Carrying Value		$ 26,556	$ 26,556
Liquidation Preference		$ 25,000	$ 25,000
Series D Preferred Stock
Temporary Equity [Line Items]
Authorized Shares (in shares)		7,058,824	7,058,824
Issued Shares (in shares)		7,058,824	7,058,824
Outstanding Shares (in shares)		7,058,824	7,058,824
Carrying Value		$ 42,799	$ 42,799
Liquidation Preference		$ 45,000	$ 45,000
Subsequent Event
Temporary Equity [Line Items]
Number of shares of common stock issued for each share of redeemable convertible preferred stock (shares)	1
Common shares issued in conversion of outstanding shares of redeemable convertible preferred stock (shares)	32,482,590

Stock option plan and stock-b34

Stock option plan and stock-based compensation - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Jun. 30, 2018	Sep. 30, 2017	Jul. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense	$ 73.5	$ 74.9
2003 Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized	89,000,000	85,000,000
Shares reserved for future issuance	1,799,258	2,088,004
Vesting period	48 months
Exercisable period	10 years
Subsequent Event | 2018 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance			21,200,000
Stock options to purchase common stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense, period of recognition	2 years 8 months 12 days	2 years 9 months 18 days

Stock option plan and stock-b35

Stock option plan and stock-based compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2018	Sep. 30, 2017
Number of Options
Beginning balance (in shares)	45,817,252
Granted (in shares)	7,676,414
Exercised (in shares)	(1,735,750)
Forfeited (in shares)	(3,387,668)
Ending balance (in shares)	48,370,248	45,817,252
Weighted Average Exercise Price
Beginning balance (in USD per share)	$ 9.20
Granted (in USD per share)	15.09
Exercised (in USD per share)	3.31
Forfeited (in USD per share)	13.05
Ending balance (in USD per share)	$ 10.08	$ 9.20
Additional Information
Weighted Average Remaining Contractual Term	6 years 8 months 12 days	6 years 10 months 24 days
Weighted Average Intrinsic Value	$ 243,060	$ 199,663
Options exercisable	30,582,952
Option exercisable - Weighted Average Exercise Price (in USD per share)	$ 7.70
Option exercisable - Weighted Average Remaining Contractual Term	5 years 4 months 24 days
Options exercisable - Weighted Average Intrinsic Value	$ 226,453
Options vested and expected to vest	45,413,361
Options vested and expected to vest - Weighted Average Exercise Price (in USD per share)	$ 9.80
Options vested and expected to vest - Weighted Average Remaining Contractual Term	6 years 7 months 6 days
Options vested and expected to vest - Weighted Average Intrinsic Value	$ 240,964

Stock option plan and stock-b36

Stock option plan and stock-based compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jul. 01, 2017	Jun. 30, 2018	Jul. 01, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 10,333	$ 9,538	$ 29,397	$ 26,961
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	49	65	156	179
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	3,651	3,529	10,417	10,136
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	4,391	3,899	12,414	11,172
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Stock-based compensation expense	$ 2,242	$ 2,045	$ 6,410	$ 5,474

Income taxes (Details)

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jul. 01, 2017	Jun. 30, 2018	Jul. 01, 2017
Income Tax Disclosure [Abstract]
Provision for (benefit from) income taxes	$ 494	$ 196	$ 1,126	$ (1,830)

Net loss per share attributab38

Net loss per share attributable to common stockholders - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jul. 01, 2017	Jun. 30, 2018	Jul. 01, 2017
Numerator:
Net income (loss)	$ (26,988)	$ (14,539)	$ (13,884)	$ 688
Less: earnings attributable to preferred stockholders	0	0	0	(688)
Net loss attributable to common stockholders—basic	(26,988)	(14,539)	(13,884)	0
Net loss attributable to common stockholders—diluted	$ (26,988)	$ (14,539)	$ (13,884)	$ 0
Denominator:
Weighted-average shares of common stock—basic and diluted (in shares)	60,074,763	56,334,641	59,484,761	55,776,325
Net loss per share attributable to common stockholders:
Basic and diluted (in USD per share)	$ (0.45)	$ (0.26)	$ (0.23)	$ 0

Net loss per share attributab39

Net loss per share attributable to common stockholders - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jul. 01, 2017	Jun. 30, 2018	Jul. 01, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	80,906,730	81,091,254	80,906,730
Stock options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	48,370,248	48,554,772	48,370,248	48,554,772
Convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	32,482,590	32,482,590	32,482,590	32,482,590
Shares subject to repurchase
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	53,892	53,892	53,892	53,892

Commitments and contingencies (

Commitments and contingencies (Details) $ in Millions	Mar. 10, 2017patent	Jun. 30, 2018USD ($)
Long-term Purchase Commitment [Line Items]
Purchase agreement obligation, term, non-cancelable		28 days
Implicit, LLC
Long-term Purchase Commitment [Line Items]
Loss contingency, patents allegedly infringed upon, number | patent	2
Inventories
Long-term Purchase Commitment [Line Items]
Purchase agreement obligation, term, cancelable		29 days
Purchase agreement obligation		$ 40.9
Purchase agreement obligation, remainder of 2018		38.9
Purchase agreement obligation, 2019		$ 2

Subsequent events (Details)

Subsequent events (Details) - Subsequent Event	Aug. 06, 2018shares	Jul. 19, 2018	Jul. 31, 2018USD ($)
Subsequent Event [Line Items]
Common shares issued in conversion of outstanding shares of redeemable convertible preferred stock (shares)	32,482,590
Number of shares of common stock issued for each share of redeemable convertible preferred stock (shares)	1
Stock split, conversion ratio		2
J.P. Morgan Chase Bank, N.A. | Term Loan under Credit Facility
Subsequent Event [Line Items]
Debt | $			$ 40,000,000