SONOS(US:SONO)2022-05-11 22:13Financial Performance - Total revenue for the three months ended April 2, 2022, was $399.8 million, a 20% increase from $332.9 million for the same period in 2021[99] - Net income for the three months ended April 2, 2022, was $8.6 million, a decrease of 50% compared to $17.2 million for the same period in 2021[98] - Total revenue for the three months ended April 2, 2022, increased by 20.1% to $399.8 million compared to $332.9 million for the same period in 2021[133] - Total revenue increased by 8.8% to $1,064,262,000 for the six months ended April 2, 2022, compared to $978,532,000 for the same period in 2021[138] - In constant currency, total revenue increased by 10.0% for the six months ended April 2, 2022, compared to the same period in 2021[142] Product Sales - Products sold increased to 1,401 units in the three months ended April 2, 2022, compared to 1,039 units in the same period of 2021, representing a 34.5% growth[99] - Total products sold for the six months ended April 2, 2022, increased by 3.0% to 3,799,000 units compared to 3,688,000 units for the same period in 2021[143] - Revenue from Sonos speakers accounted for 79.5% of total revenue, increasing by 18.8% to $317.7 million, driven by the introduction of new products and strong demand[134] - Revenue from Partner products and other sources surged by 56.0% to $20.8 million, primarily due to partnerships with IKEA and Sonance[134] Profitability Metrics - Adjusted EBITDA for the three months ended April 2, 2022, was $46.9 million, with an adjusted EBITDA margin of 11.7%, down from $48.5 million and 14.6% in the same period of 2021[99] - Gross profit for the three months ended April 2, 2022, was $179.0 million, resulting in a gross margin of 44.8%[131] - Operating income for the same period was $10.0 million, representing an operating margin of 2.5%[131] - Gross margin decreased by 500 basis points to 44.8% for the three months ended April 2, 2022, primarily due to increased component and shipping costs[145] Expenses - Research and development expenses for the three months ended April 2, 2022, were $64.9 million, representing 16.2% of total revenue[131] - Total operating expenses increased to $169.0 million, accounting for 42.3% of total revenue[131] - Sales and marketing expenses increased by 4.8% to $59,955,000 for the three months ended April 2, 2022, compared to $57,205,000 for the same period in 2021[151] - General and administrative expenses increased by 10.8% to $44,090,000 for the three months ended April 2, 2022, compared to $39,806,000 for the same period in 2021[154] Supply Chain and Market Conditions - The company has experienced significant supply chain challenges due to COVID-19, leading to increased component costs and delayed product availability[94] - The conflict between Russia and Ukraine has caused increased inflationary pressures and foreign exchange rate fluctuations, but did not materially impact the company's results for the quarter ended April 2, 2022[96] - The company aims to diversify its supply chain into Malaysia to mitigate ongoing supply chain challenges[95] - The company continues to face supply chain challenges, resulting in a backlog despite improved product availability[133] Cash Flow and Financing - The net cash provided by operating activities for the six months ended April 2, 2022, was $82.4 million, a decrease from $175.9 million for the same period in 2021[170] - Cash used in investing activities for the six months ended April 2, 2022, was $42.8 million, primarily for acquisitions and purchases of property and equipment[172] - The company had $606.7 million in cash and cash equivalents as of April 2, 2022, including $111.9 million held by foreign subsidiaries[164] - The company entered into a Revolving Credit Agreement allowing borrowing up to $100.0 million, with a maturity date of October 2026[165] Foreign Currency Impact - For the three months ended April 2, 2022, the company recognized a foreign currency loss of $2.2 million, compared to a loss of $1.6 million for the same period in 2021[182] - For the six months ended April 2, 2022, the company recognized a foreign currency loss of $3.7 million, while it had a gain of $2.6 million for the same period in 2021[182] - The strengthening of the U.S. dollar relative to the euro in the latter part of Q2 2022 may negatively impact revenue and gross margins from foreign currency-denominated sales[182] - A hypothetical adverse change of 10% in foreign currency transactions would have resulted in an adverse impact on income before taxes of approximately $5.1 million for the three months and $15.6 million for the six months ended April 2, 2022[182]