SONOS(US:SONO)2023-02-08 16:00Revenue Performance - Total revenue for the three months ended December 31, 2022, was $672.6 million, compared to $664.5 million for the same period in 2021, representing a growth of 1.7%[96] - Total revenue for the three months ended December 31, 2022, was $672.6 million, representing a 1.2% increase compared to $664.5 million for the same period in 2021[128] - Revenue from Sonos speakers was $539.2 million, accounting for 80.2% of total revenue, and increased by 7.4% compared to $501.9 million in the prior year[129] - Revenue in the Americas increased by 6.1%, while revenue in EMEA decreased by 2.1% and APAC decreased by 21.3% for the same period[130] Product Sales and Supply Chain - Products sold increased to 2,482 units in the three months ended December 31, 2022, from 2,398 units in the same period of 2021, reflecting a growth of 3.5%[96] - Total products sold increased by 3.5% to 2.482 million units for the three months ended December 31, 2022, compared to 2.398 million units in the prior year[132] - The company experienced supply chain improvements, including lower shipping and logistics costs, and shorter lead times, contributing to a recovery in product supply[92] Financial Performance - Adjusted EBITDA for the three months ended December 31, 2022, was $123.9 million, down from $163.1 million in the same period of 2021, resulting in an adjusted EBITDA margin of 18.4%, compared to 24.6% in the prior year[96][106] - Gross profit for the three months ended December 31, 2022, was $285.1 million, down 10.2% from $317.4 million in the same period of 2021[133] - Cost of revenue increased by $40.4 million, or 11.6%, to $387.5 million, primarily due to higher product sales and increased component costs[133] - Gross margin decreased to 42.4% for the three months ended December 31, 2022, down from 47.8% in the prior year, a decline of 540 basis points[134] - Operating income for the three months ended December 31, 2022, was $86.3 million, compared to $132.6 million in the same period of 2021[127] - Net income for the three months ended December 31, 2022, was $75.2 million, a decrease from $123.5 million in the prior year[127] Expenses and Investments - Research and development expenses increased by $15.6 million, or 25.5%, to $76.9 million for the three months ended December 31, 2022, compared to $61.3 million for the same period in 2022[135] - Sales and marketing expenses decreased by $5.0 million, or 6.0%, to $78.7 million for the three months ended December 31, 2022, compared to $83.7 million for the same period in 2022[136] - General and administrative expenses increased by $3.4 million, or 8.5%, to $43.1 million for the three months ended December 31, 2022, compared to $39.7 million for the same period in 2022[137] - Cash used in investing activities was $14.7 million for the three months ended December 31, 2022, primarily for purchases of property and equipment[150] - Cash used in financing activities was $15.3 million for the three months ended December 31, 2022, mainly for repurchases of common stock[151] Cash Flow and Financial Position - Net cash provided by operating activities was $182.3 million for the three months ended December 31, 2022, compared to $179.9 million for the same period in 2022[147] - As of December 31, 2022, cash and cash equivalents totaled $431.5 million, including $71.1 million held by foreign subsidiaries[142] - The company believes existing cash and cash equivalents, along with cash flows from operations, will be sufficient to meet long-term working capital needs for at least the next 12 months[144] Economic and Market Conditions - The economic environment in the first quarter of fiscal 2023 was impacted by inflation, rising interest rates, and unfavorable foreign exchange rates, negatively affecting revenue and gross margin[93] - The company expects fluctuations in foreign currency exchange rates to continue impacting revenue and other financial results in the future[122] Strategic Initiatives - The company plans to introduce new products to appeal to a broader consumer base and enhance the listening experience across various environments[107] - The company is focusing on expanding its e-commerce capabilities to support growth as consumer preferences shift towards online sales channels[110] - Partnerships with third-party retailers and custom installers remain crucial for the company's distribution strategy and customer engagement[111] - The company has a robust product and software roadmap aimed at capturing the expanding addressable market for its products[91] - The company has maintained 17 consecutive years of revenue growth since its first product launch, demonstrating strong market presence and customer engagement[90] Foreign Currency Impact - For the three months ended December 31, 2022, the company recognized a gain from foreign currency exchange of $23.6 million[159] - In the same period, the company experienced a loss from foreign currency exchange amounting to $1.4 million[159] - A hypothetical adverse change of 10% in foreign currency transactions would have resulted in an adverse impact on income before provision for income taxes of approximately $11.1 million for the three months ended December 31, 2022[159] Taxation - The provision for income taxes increased significantly to $36.5 million for the three months ended December 31, 2022, from $7.6 million for the same period in 2022[139] Interest Income - Interest income increased to $1.97 million for the three months ended December 31, 2022, compared to $33, resulting in a change of $1.93 million[138]