Wireless speaker maker Sonos files for IPO

Wireless speaker maker Sonos files for IPO

Sonos filed for its widely expected initial public offering, as the connected-speaker company looks to take on tech-industry giants Amazon, Google and Apple. Moreover, the company said consumers listen to approximately 80% more music after purchasing their first Sonos product. Sonos reported revenue of $992.5 million for fiscal year 2017, a 10% year-over-year increase, and a net loss of $14.2 million versus a net loss of $38.2 million in 2016.

The company did not specify how many shares would be for sale, nor did it list an estimated offering price. In fact, the company's own voice-activated Sonos One and Sonos Beam speakers make use of Alexa.

The Santa Barbara, California-based company filed with an offering size of $100 million, a placeholder amount used to calculate fees that is likely to change.

"Our system is not - and never will be - an entry gate into a walled garden", writes CEO Patrick Spence.

As for the Google Assistant, Sonos says it's working on that and repeats the recent promise by execs that a 2018 launch is still intended.


But Sonos also acknowledged in the SEC filing that it faces intensifying competition from Amazon, Apple and Google, along with Samsung, Bose, Bang & Olufsen and others.

In terms of risk factors, the company points to its history of losses, the unpredictability of its revenue growth and the fact that it operates in "highly competitive markets" and is "dependent on partners who offer products that compete with our own".

According to Sonos, customers listen to an average of 70 hours of audio content per month. Of its full-time employees, 66% are based in the USA, with the rest in global locations including Australia, China, Denmark, France, Germany, the Netherlands, Sweden and the United Kingdom.

The company is on track to surpass $1 billion in sales this fiscal year after booking revenue of $655.7 million for the six months ending in March, according to a filing with the Securities and Exchange Commission on Friday. That could impose a huge financial burden on Sonos if Inventec's operations are disrupted. Sonos has sold over 19 million devices since it first set up shop, and it creates an enviable degree of loyalty.

Sonos's largest investor is KKR & Co., which owned an nearly 26 per cent stake as of June 30, according to the filing.

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