Sonos strives for $264-million IPO

Sonos Inc., the wireless speaker pioneer taking on Amazon.com Inc., Google and Apple Inc., plans to raise as much as $264.1 million in its upcoming initial public offering.

Although the wireless speakers market is booming — Sonos says its customers listen to about 70 hours of content a month — competition has increased since the company introduced its first home-audio system in 2005. Sonos, which has traditionally marketed its sleek, highend speakers to audiophiles who prize sound quality, cited an “extremely competitive and rapidly evolving” market among risk factors in its IPO.

The Santa Barbara company is selling 13.9 million shares at a price of $17 to $19 a share, it said in a regulatory filing Monday. The underwriters have been given the right to buy an additional 2.08 million shares to cover any overallotment.

The total market valuation of Sonos at $19 a share would be $1.87 billion. Sonos was targeting a valuation of $2.5 billion to $3 billion in the IPO, people familiar with the matter said in April. The company — founded in 2002 — has been led by Patrick Spence since January 2017, and its products are in about 7 million households worldwide.

The rise of Sonos was hit by the launch of Echo, Amazon’s voice-controlled speaker, in late 2014. Months earlier, Sonos executives were telling employees and the public that it would cross $1 billion in revenue for the first time in 2015.

In fiscal 2017, Sonos posted a net loss of $14.2 million on revenue of $992.5 million, an improvement compared with a net loss of $38.2 million on revenue of $901.3 million the previous financial year, according to a filing.

The latest figures are more positive. Sonos posted revenue of $655.7 million in the six months that ended March 31. It also swung to a profit, with $13.1 million in net income for the same period.