Sonos ready to make noise with IPO
Speaker company to begin trading on Nasdaq.
Sonos’ premium wireless speakers have been a hit with consumers. Now the audio company is about to find out how it plays on Wall Street.
The Santa Barbara, California-based company’s shares will begin trading on Nasdaq on Thursday. With an expected price range of $17 to $19 per share, Sonos is seeking a valuation of more than $2 billion on a fully diluted basis.
Sonos, which generated revenue of about $1 billion in fiscal year 2017, will use proceeds from the initial public offering in its mission to create everevolving voice-controlled whole home music systems.
Founded in 2002, Sonos initially made a mark with multiroom speaker systems, delivering its first in 2005. Most recently, it has sought to help existing and new customers take part in the growing smart speaker movement fueled by Amazon, Google and Apple.
Sonos’ latest product, the $399 Beam sound bar released two weeks ago, has built-in voice control for Amazon’s digital assistant Alexa and lets users ask Apple’s assistant Siri to control music on Sonos systems. Compatibility with Google Assistant is expected for Sonos speakers later this year.
“They have obviously created this high-end speaker market for households, and they have a high level of trust and repeat customer purchasing, which says a lot about the quality of the devices they put into the market,” said Ranjit Atwal, a research director at research and consulting firm Gartner.
Sonos’ various apps work with popular music services such as Spotify and Pandora, but the company must continue to improve its software to provide a fluid, frictionless experience, says James McQuivey, an analyst with research firm Forrester. That will help Sonos in its challenge to “reach the segment of the market who want speakers better than the speakers available from Amazon, Google and Apple,” he said.
The Sonos One speaker
($199, released in October) was the company’s first product with built-in voice capability. Updates in the Sonos and Alexa apps gave buyers of other Sonos speakers the ability to talk to Alexa to play Amazon Music and some other music services by voice.
Three weeks ago, Sonos announced support for Apple’s AirPlay 2 wireless streaming technology, which lets you stream music from yo uri OS device to its speakers. Air Play 2compatible Son os speakers include the new Beam sound bar, the Sonos One, Playbase ($699) TV stand with 10 speakers built in and the second generation
Play:5 speaker ($499).
As long as you have one of these speakers, all other Sonos speakers in your home will respond to voice and app controls. With Google Assistant voice support in the works, “we absolutely envision a world where different people in the home use different voice services,” Giles Martin, Sonos sound experience leader, said during the unveiling of the So-
“They have a high level of trust and repeat customer purchasing, which says a lot about the quality of the devices they put into the market.” Ranjit Atwal A research director at research and consulting firm Gartner
nos One last year. “We are committed to taking this agnostic approach.”
Sonos, which is offering a total of 13.9 million shares in the IPO, generated $992.5 million in revenue in the fiscal year that ended Sept. 30, up 10 percent from the previous year, the company says in a filing with the Securities and Exchange Commission. For the six months ending March 31, Sonos reported net income of $13.1 million. More than half (55 percent) of the company’s revenue comes from U.S. sales.