SONOS(US:SONO)2021-05-12 22:22Financial Performance - Total revenue for the three months ended April 3, 2021, was $332.9 million, a 90.2% increase from $175.1 million for the same period in 2020[81] - Net income for the three months ended April 3, 2021, was $17.2 million, compared to a net loss of $52.3 million for the same period in 2020[80] - Adjusted EBITDA for the three months ended April 3, 2021, was $48.5 million, with an adjusted EBITDA margin of 14.6%, compared to an adjusted EBITDA loss of $28.4 million and a margin of -16.2% in the same period of 2020[89] - Total revenue increased by 32.7% to $978.5 million for the six months ended April 3, 2021, compared to $737.2 million for the same period in 2020[113] - Gross profit for the three months ended April 3, 2021, was $165,776,000, with a gross margin of 49.8%, compared to a gross profit of $73,009,000 and a margin of 41.7% in the prior year[106] - Operating income for the three months ended April 3, 2021, was $12,395,000, compared to an operating loss of $53,207,000 for the same period in 2020[106] - Gross profit for the six months ended April 3, 2021 increased by 54.7% to $465.2 million, with a gross margin of 47.5%[122] Sales and Product Performance - Products sold increased to 1,039 thousand units in the three months ended April 3, 2021, from 681 thousand units in the same period of 2020, representing a 52.6% growth[81] - Revenue from Sonos speakers accounted for 80.4% of total revenue, increasing by 129.9% to $267,534,000, driven by the success of the Arc and Sub products[109] - Sonos speakers revenue represented 81.2% of total revenue, increasing by 36.4% to $795.1 million for the six months ended April 3, 2021[114] - Total products sold increased by 1.9% to 3,688 thousand units for the six months ended April 3, 2021, driven by growth in Sonos speakers and system products[117] Expenses and Investments - Research and development expenses for the three months ended April 3, 2021, were $56,370,000, representing 16.9% of total revenue, compared to $49,593,000 or 28.3% in the prior year[107] - Research and development expenses increased by 6.5% to $108.7 million for the six months ended April 3, 2021, representing 11.1% of total revenue[125] - Sales and marketing expenses increased by 2.9% to $131.7 million for the six months ended April 3, 2021, representing 13.5% of total revenue[127] - General and administrative expenses increased by $13.7 million, or 52.4%, to $39.8 million for the three months ended April 3, 2021, primarily due to $9.3 million in legal fees related to IP litigation and $4.8 million in higher personnel-related expenses[128] - For the six months ended April 3, 2021, general and administrative expenses rose by $18.7 million, or 33.2%, totaling $75.0 million, driven by $16.0 million in legal fees and $4.8 million in personnel-related expenses[129] Cash Flow and Financing - As of April 3, 2021, the company had cash and cash equivalents of $638.9 million, including $88.0 million held by foreign subsidiaries[137] - Net cash provided by operating activities was $176.0 million for the six months ended April 3, 2021, significantly up from $35.4 million for the same period in 2020[142] - Cash used in investing activities was $19.9 million for the six months ended April 3, 2021, primarily for manufacturing-related tooling and test equipment[145] - Cash provided by financing activities was $74.7 million for the six months ended April 3, 2021, mainly from proceeds of $119.2 million from the exercise of stock options[146] - The company had $57.5 million in non-cancelable purchase commitments for inventory expected to be purchased in the remainder of fiscal 2021[147] - The Credit Facility allows borrowing up to $80.0 million, with no outstanding borrowings as of April 3, 2021[140] Foreign Currency Exposure - The company expects continued fluctuations in foreign currency exchange gains and losses due to changes in exchange rates[102] - For the three months ended April 3, 2021, the company recognized a loss from foreign currency of $1.6 million, compared to a loss of $1.5 million for the same period in 2020[154] - For the six months ended April 3, 2021, the company recognized a gain from foreign currency of $2.6 million, down from a gain of $2.9 million for the same period in 2020[154] - A hypothetical adverse change of 10% in foreign currency exchange rates would have resulted in an adverse impact on income before provision for income taxes of approximately $5.2 million for the three months ended April 3, 2021[154] - The company's international sales are primarily denominated in foreign currencies, exposing it to fluctuations in exchange rates, particularly with the euro and British pound[152] - A portion of the company's operating expenses is incurred outside the United States and is also subject to foreign currency exchange rate fluctuations[152] - The company's continued international expansion increases its exposure to exchange rate fluctuations, which could significantly impact future results of operations[153] Strategic Outlook - The company expects ongoing supply chain challenges due to the COVID-19 pandemic to impact product availability until fiscal 2022[78] - Direct-to-consumer sales channel performance has been strong, primarily driven by increased orders through the company's website[78] - The company plans to continue investing in e-commerce capabilities to drive direct sales and support overall growth and profitability[92] - The company aims to introduce new products that appeal to a broad set of consumers and enhance its differentiated listening platform[90] - The introduction of new products may increase revenue but could also impact sales of existing products as consumer preferences shift[104] Accounting and Estimates - The company evaluates its estimates and assumptions regarding financial statements on an ongoing basis, based on historical experience and reasonable assumptions[149] - There have been no material changes to the company's critical accounting policies compared to those disclosed in its Annual Report[150]