Sonos files to go public as it amps up its speaker game

  • Sonos files to go public as it amps up its speaker game

Sonos files to go public as it amps up its speaker game

Sonos, the smart home audio system for design/music lovers, just filed for IPO in an attempt to take on the greater connected consumer electronics industry. If all goes to plan with the IPO, it hopes to trade on the Nasdaq Global Select Market, under "SONO". In the filing, Sonos claims to have over 19 million registered products in approximately 6.9 million households globally. Despite generating $992.5 million in revenue in the 2017 fiscal year, the company reported a net loss of $14.2 million.

Perhaps more worrying, Sonos relies on a few companies to sell its products.

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

At the same time, Sonos isn't exclusively offering Amazon's Alexa voice assistant, so a Sonos speaker doesn't guarantee an Alexa presence. Last year, CEO Patrick Spence says, 38-percent of the company's new product registrations were from existing owners adding another speaker.

Sonos also relies heavily on Amazon as a retail channel.

Sonos is diversifying its voice offerings, promising integration with Google Assistant and Apple's Siri this year.

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.

Sonos acknowledged the risks in its IPO prospectus: "To the extent products offered by our partners compete with our products, they may choose to promote their own products over ours, or could end our partnerships and cease selling or promoting our products entirely", the company said.

According to Sonos, customers listen to an average of 70 hours of audio content per month. It estimated that customers listened to 5 billion hours of audio content using Sonos products a year ago, a 33 percent increase from 2016.

"If further tariffs are imposed on a broader range of imports. we may be required to raise our prices, which may result in the loss of customers and harm our reputation and operating performance", the company said in the filing. In addition, Inventec has the right to terminate its agreement with Sonos for any reason with 180 days' notice, according to the filing. KKR initially invested $100 million in Sonos in 2012.