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Tuesday, November 20 , 2018, 10:50 pm | Fair 50º


Santa Barbara-Based Sonos Files Paperwork to Go Public

Santa Barbara-based Sonos filed paperwork with the U.S. Securities and Exchange Commission Friday to go public. 

The company, which has 400 employees in Santa Barbara, will use SONO as its ticker symbol.

"From an investor perspective, there’s intrinsic value in what we’re building," wrote Sonos CEO Patrick Spence, in the offering paperwork.

"An amazing 60 percent of our customers are repeat buyers, adding to their Sonos system as their lives grow. It means that a single Sonos product in a home can, over time, become a hub in a network of Sonos products, and often does."

Sonos launched the first wireless multi-room home sound system in 2005. In October of 2017, it launched its first voice-enabled wireless speaker, Sonos One, and a voice-enabled home theater speaker, Sonos Beam, this July. Sonos has about 100 streaming content providers, including Apple Music, Pandora, Spotify and TuneIn. 

Sonos systems can be found in more than 7 million homes, according to the company's filing. People who own then have on average 2.8 Sonos products.

The company didn't list how many shares would be up for sale, but said that it intends to raise $100M. 

"We intend to use the net proceeds of this offering for working capital and other general corporate purposes," according to the S-1 filing. "We may also use a portion of the net proceeds to acquire or invest in complementary businesses, products, services, technologies or assets. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders."

The filing documents talk about benefits and risks to the initial public offering. 

"We are currently developing voice-enabled speaker systems that are enhanced with the technology of our partners, including those who sell competing products," the filing document states. "We introduced Sonos One in October 2017 and Sonos Beam in July 2018, which are both voice-enabled speakers that feature voice-control enablement powered by Amazon’s Alexa technology.

"Our current agreement with Amazon allows Amazon to disable the Alexa integration in our Sonos One and Sonos Beam products with limited notice. As such, it is possible that Amazon, which sells products that compete with ours, may on limited notice disable the integration, which would cause our Sonos One or Sonos Beam products to lose their voice-enabled functionality. Amazon could also begin charging us for this integration which would harm our operating results," the filing states.

As of March 31, 2018, according to the company's SEC filing, customers listen to approximately 70 hours of content per month and to approximately 80 percent more music after purchasing their first Sonos product. 

The company reported $992.5 million in revenue for the 2017 fiscal year, with a net loss of $14.2 million.

The company's revenues, however, have been growing, as its losses have been shrinking, over the past three years.

In 2016, Sonos revenues were $901.2 milion and its net losses were $38.2 million, and in 2015, its revenues were $843.5 million, with net losses of $68.77 million.

Noozhawk staff writer Joshua Molina can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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