Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Nov. 07, 2023 | Mar. 31, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Sep. 30, 2023 | ||
Current Fiscal Year End Date | --09-30 | ||
Document Transition Report | false | ||
Entity File Number | 001-38603 | ||
Entity Registrant Name | SONOS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 03-0479476 | ||
Entity Address, Address Line One | 614 Chapala Street | ||
Entity Address, City or Town | Santa Barbara | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 93101 | ||
City Area Code | 805 | ||
Local Phone Number | 965-3001 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | SONO | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Small Reporting Company | false | ||
Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Public Float | $ 1,546.1 | ||
Entity Common Stock, Shares Outstanding | 125,150,415 | ||
Documents Incorporated by Reference | Part III incorporates by reference certain information from the registrant’s definitive proxy statement (the "2024 Proxy Statement") relating to its 2024 Annual Meeting of Stockholders. The 2024 Proxy Statement will be filed with the United States Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates. | ||
Entity Central Index Key | 0001314727 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Firm ID | 238 | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Location | Los Angeles, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Oct. 01, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 220,231 | $ 274,855 |
Accounts receivable, net of allowances of $31,786 and $26,317 as of September 30, 2023, and October 1, 2022, respectivly | 67,583 | 101,206 |
Inventories | 346,521 | 454,288 |
Prepaid and other current assets | 25,296 | 37,042 |
Total current assets | 659,631 | 867,391 |
Property and equipment, net | 87,075 | 86,168 |
Operating lease right-of-use assets | 48,918 | 28,329 |
Goodwill | 80,420 | 77,300 |
Intangible assets, net: | ||
In-process research and development | 69,791 | 64,680 |
Other intangible assets | 20,218 | 26,384 |
Deferred tax assets | 1,659 | 1,508 |
Other noncurrent assets | 34,529 | 36,628 |
Total assets | 1,002,241 | 1,188,388 |
Current liabilities: | ||
Accounts payable | 187,981 | 335,758 |
Accrued expenses | 89,717 | 109,290 |
Accrued compensation | 22,079 | 23,624 |
Deferred revenue, current | 20,188 | 27,318 |
Other current liabilities | 34,253 | 39,649 |
Total current liabilities | 354,218 | 535,639 |
Operating lease liabilities, noncurrent | 54,956 | 25,596 |
Deferred revenue, noncurrent | 60,650 | 56,152 |
Deferred tax liabilities | 9,846 | 9,642 |
Other noncurrent liabilities | 3,914 | 846 |
Total liabilities | 483,584 | 627,875 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 500,000,000 shares authorized, 130,399,940 and 129,823,663 shares issued, 125,113,916 and 126,668,723 shares outstanding as of September 30, 2023, and October 1, 2022, respectively | 130 | 130 |
Treasury stock, 5,286,024 and 3,154,940 shares at cost as of September 30, 2023, and October 1, 2022, respectively | (72,586) | (50,896) |
Additional paid-in capital | 607,345 | 617,390 |
Accumulated deficit | (12,788) | (2,514) |
Accumulated other comprehensive loss | (3,444) | (3,597) |
Total stockholders' equity | 518,657 | 560,513 |
Total liabilities and stockholders’ equity | $ 1,002,241 | $ 1,188,388 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Oct. 01, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 31,786 | $ 26,317 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 130,399,940 | 129,823,663 |
Common stock, shares outstanding (in shares) | 125,113,916 | 126,668,723 |
Treasury stock, shares at cost (in shares) | 5,286,024 | 3,154,940 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Income Statement [Abstract] | |||
Revenue | $ 1,655,255 | $ 1,752,336 | $ 1,716,744 |
Cost of revenue | 938,765 | 955,969 | 906,750 |
Gross profit | 716,490 | 796,367 | 809,994 |
Operating expenses | |||
Research and development | 301,001 | 256,073 | 230,078 |
Sales and marketing | 267,518 | 280,333 | 272,124 |
General and administrative | 168,518 | 170,429 | 152,828 |
Total operating expenses | 737,037 | 706,835 | 655,030 |
Operating income (loss) | (20,547) | 89,532 | 154,964 |
Other income (expense), net | |||
Interest income | 10,201 | 1,655 | 146 |
Interest expense | (733) | (552) | (592) |
Other income (expense), net | 15,473 | (21,905) | 2,407 |
Total other income (expense), net | 24,941 | (20,802) | 1,961 |
Income before provision for (benefit from) income taxes | 4,394 | 68,730 | 156,925 |
Provision for (benefit from) income taxes | 14,668 | 1,347 | (1,670) |
Net income (loss) | (10,274) | 67,383 | 158,595 |
Earnings Per Share [Abstract] | |||
Net Income (Loss) | $ (10,274) | $ 67,383 | $ 158,595 |
Basic (in USD per share) | $ (0.08) | $ 0.53 | $ 1.3 |
Diluted (in USD per share) | $ (0.08) | $ 0.49 | $ 1.13 |
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders: | |||
Basic | 127,702,885 | 127,691,030 | 122,245,212 |
Diluted | 127,702,885 | 137,762,078 | 140,309,152 |
Total comprehensive income (loss) | |||
Net income (loss) | $ (10,274) | $ 67,383 | $ 158,595 |
Change in foreign currency translation adjustment | 153 | (2,221) | 514 |
Comprehensive income (loss) | $ (10,121) | $ 65,162 | $ 159,109 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balances, beginning of period (in shares) at Oct. 03, 2020 | 113,915,233 | (1,571,138) | ||||
Balances, beginning of period at Oct. 03, 2020 | $ 297,839 | $ 114 | $ 548,993 | $ (20,886) | $ (228,492) | $ (1,890) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock pursuant to equity incentive plans (in shares) | 17,544,060 | |||||
Issuance of common stock pursuant to equity incentive plans | 147,818 | $ 18 | 147,800 | |||
Retirement of treasury stock (in shares) | (2,602,208) | 2,602,208 | ||||
Retirement of treasury stock | $ (3) | (68,458) | $ 68,461 | |||
Repurchase of common stock (in shares) | (1,394,006) | |||||
Repurchase of common stock | (50,014) | $ (50,014) | ||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") (in shares) | (1,508,876) | |||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") | (47,837) | $ (47,837) | ||||
Stock-based compensation expense | 62,127 | 62,127 | ||||
Net income (loss) | 158,595 | 158,595 | ||||
Change in foreign currency translation adjustment | 514 | 514 | ||||
Balances, ending of period (in shares) at Oct. 02, 2021 | 128,857,085 | (1,871,812) | ||||
Balances, ending of period at Oct. 02, 2021 | 569,042 | $ 129 | 690,462 | $ (50,276) | (69,897) | (1,376) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock pursuant to equity incentive plans (in shares) | 7,825,793 | |||||
Issuance of common stock pursuant to equity incentive plans | 40,443 | $ 8 | 40,435 | |||
Retirement of treasury stock (in shares) | (6,859,215) | 6,859,215 | ||||
Retirement of treasury stock | $ (7) | (189,147) | $ 189,154 | |||
Repurchase of common stock (in shares) | (6,578,973) | |||||
Repurchase of common stock | (150,121) | $ (150,121) | ||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") (in shares) | (1,563,370) | |||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") | (39,653) | $ (39,653) | ||||
Stock-based compensation expense | 75,640 | 75,640 | ||||
Net income (loss) | 67,383 | 67,383 | ||||
Change in foreign currency translation adjustment | (2,221) | (2,221) | ||||
Balances, ending of period (in shares) at Oct. 01, 2022 | 129,823,663 | (3,154,940) | ||||
Balances, ending of period at Oct. 01, 2022 | $ 560,513 | $ 130 | 617,390 | $ (50,896) | (2,514) | (3,597) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock pursuant to equity incentive plans (in shares) | 2,005,776 | 6,714,406 | ||||
Issuance of common stock pursuant to equity incentive plans | $ 21,346 | $ 6 | 21,340 | |||
Retirement of treasury stock (in shares) | (6,138,129) | (6,138,129) | 6,138,129 | |||
Retirement of treasury stock | $ (6) | (108,242) | $ 108,248 | |||
Repurchase of common stock (in shares) | (6,555,702) | (6,555,702) | ||||
Repurchase of common stock | $ (100,064) | $ (100,064) | ||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") (in shares) | (1,713,511) | |||||
Repurchase of common stock related to shares withheld for tax in connection with vesting of restricted stock unit awards ("RSUs") | (29,874) | $ (29,874) | ||||
Stock-based compensation expense | 76,857 | 76,857 | ||||
Net income (loss) | (10,274) | (10,274) | ||||
Change in foreign currency translation adjustment | 153 | 153 | ||||
Balances, ending of period (in shares) at Sep. 30, 2023 | 130,399,940 | (5,286,024) | ||||
Balances, ending of period at Sep. 30, 2023 | $ 518,657 | $ 130 | $ 607,345 | $ (72,586) | $ (12,788) | $ (3,444) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Cash flows from operating activities | |||
Net income (loss) | $ (10,274) | $ 67,383 | $ 158,595 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 48,969 | 38,504 | 33,882 |
Restructuring and abandonment charges | 5,533 | ||
Stock-based compensation expense | 76,857 | 75,640 | 62,127 |
Provision for inventory obsolescence | 20,640 | 6,276 | 2,790 |
Other | 5,535 | 4,705 | 2,713 |
Deferred income taxes | (583) | (1,508) | (8,330) |
Foreign currency transaction (gain) loss | (7,335) | 10,775 | (1,108) |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 32,120 | (5,513) | (45,697) |
Inventories | 87,004 | (277,489) | (7,911) |
Other assets | 10,470 | (16,604) | (30,009) |
Accounts payable and accrued expenses | (162,345) | 129,686 | 26,231 |
Accrued compensation | (2,185) | (52,904) | 33,447 |
Deferred revenue | (4,576) | (1,667) | 27,587 |
Other liabilities | 576 | (5,544) | (1,091) |
Net cash provided by (used in) operating activities | 100,406 | (28,260) | 253,226 |
Cash flows from investing activities | |||
Purchases of property and equipment, intangible and other assets | (50,286) | (46,216) | (45,531) |
Cash paid for acquisitions, net of acquired cash | (126,416) | ||
Net cash used in investing activities | (50,286) | (172,632) | (45,531) |
Cash flows from financing activities | |||
Payments for debt issuance costs | (929) | ||
Proceeds from exercise of stock options | 21,346 | 40,443 | 147,818 |
Payments for repurchase of common stock | (100,064) | (150,121) | (50,014) |
Payments for repurchase of common stock related to shares withheld for tax in connection with vesting of RSUs | (29,874) | (39,653) | (47,837) |
Repayments of borrowings | (25,000) | ||
Net cash provided by (used in) financing activities | (108,592) | (150,260) | 24,967 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3,848 | (14,094) | 148 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (54,624) | (365,246) | 232,810 |
Cash, cash equivalents, and restricted cash | |||
Beginning of period | 274,855 | 640,101 | 407,291 |
End of period | 220,231 | 274,855 | 640,101 |
Supplemental disclosure | |||
Cash paid for interest | 1,330 | 344 | 502 |
Cash paid for taxes, net of refunds | 9,522 | 9,306 | 4,114 |
Cash paid for amounts included in the measurement of lease liabilities | 14,218 | 14,636 | 18,657 |
Supplemental disclosure of non-cash investing and financing activities | |||
Purchases of property and equipment, accrued but not paid | 2,784 | 9,112 | 5,653 |
Right-of-use assets obtained in exchange for lease liabilities | 31,692 | $ 5,054 | $ 2,010 |
Change in estimate of asset retirement obligations | $ 2,290 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Jan. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Pay vs Performance Disclosure | |||||||||||
Net Income (Loss) | $ (31,239) | $ (23,571) | $ (30,652) | $ 75,188 | $ (64,067) | $ (597) | $ 8,566 | $ 123,481 | $ (10,274) | $ 67,383 | $ 158,595 |
Insider Trading Arrangements
Insider Trading Arrangements | 12 Months Ended |
Sep. 30, 2023 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On September 7, 2023 , Julius Genachowski , Chairperson and a member of our Board of Directors , adopted a trading plan intended to satisfy the requirements of Rule 10b5-1(c). The plan provides that Mr. Genachowski may sell up to 46,434 shares of common stock subject to options granted under our equity incentive plan. The plan terminates on the earlier of the date all shares under the plan are sold or 1) March 10, 2025 , with respect to 6,724 shares of common stock subject to options granted in March 2015 and 2) March 14, 2025 , with respect to 39,710 shares of common stock subject to options granted in November 2016. |
Name | Julius Genachowski |
Title | Chairperson and a member of our Board of Directors |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | September 7, 2023 |
Aggregate Available | 46,434 |
Rule 10b5-1(c) Trading Plan One [Member] | |
Trading Arrangements, by Individual | |
Termination Date | March 10, 2025 |
Aggregate Available | 6,724 |
Rule 10b5-1(c) Trading Plan Two [Member] | |
Trading Arrangements, by Individual | |
Termination Date | March 14, 2025 |
Aggregate Available | 39,710 |
Business Overview
Business Overview | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview | 1. Busin ess Overview Description of Business Sonos, Inc. and its wholly owned subsidiaries (collectively, “Sonos,” the “Company,” “we,” “us” or “our”) designs, develops, manufactures, and sells audio products and services. The Sonos sound system provides customers with an immersive listening experience created by the design of its speakers and components, a proprietary software platform, and the ability to stream content from a variety of sources over the customer’s wireless network or over Bluetooth. The Company’s products are sold through third-party physical retailers, including custom installers of home audio systems, select e-commerce retailers, and its website sonos.com. The Company’s products are distributed in over 60 countries through its wholly owned subsidiaries: Sonos Europe B.V. in the Netherlands, Beijing Sonos Technology Co. Ltd. in China, Sonos Japan GK in Japan, and Sonos Australia Pty Ltd. in Australia. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Preparation The consolidated financial statements, which include the accounts of Sonos, Inc. and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation. The Company operates on a 52-week or 53-week fiscal year ending on the Saturday nearest September 30 each year. The Company’s fiscal year is divided into four quarters of 13 weeks, each beginning on a Sunday and containing two 4-week periods followed by a 5-week period. An additional week is included in the fourth fiscal quarter approximately every five years to realign fiscal quarters with calendar quarters. This last occurred in the Company’s fiscal year ended October 3, 2020, and will reoccur in the fiscal year ending October 3, 2026. As used in the Annual Report on Form 10-K, “fiscal 2023” refers to the 52-week fiscal year ending September 30, 2023, “fiscal 2022” refers to the 52-week fiscal year ending October 1, 2022, and “fiscal 2021” refers to the 52-week fiscal year ending October 2, 2021. Use of Estimates and Judgments The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. For revenue recognition, examples of estimates and judgments include: determining the nature and timing of satisfaction of performance obligations, determining the standalone selling price ("SSP") of performance obligations and estimating variable consideration such as sales incentives and product returns. Additionally, estimates and judgments are made by management for allowances for credit losses, excess and obsolete inventory, loss on purchase commitments, useful lives associated with property and equipment, incremental borrowing rates associated with leases, the recording of and release of valuation allowances with respect to deferred tax assets and uncertain tax positions, impairment of long-lived assets, impairment of goodwill and indefinite-lived intangible assets, warranty, contingencies and valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, the Company evaluates its estimates and judgments compared to historical experience and trends that form the basis for making estimates and judgments about the carrying value of assets and liabilities. Comprehensive Income (Loss) Comprehensive income (loss) consists of two components: net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to net gains and losses that are recorded as an element of stockholders’ equity but are excluded from net income (loss). The Company’s other comprehensive income (loss) consists of net unrealized gains and losses on foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid financial instruments with insignificant interest rate risk that are readily convertible to cash and have maturities of three months or less from the date of purchase. As of September 30, 2023, and October 1, 2022 , cash equivalents consisted of money market funds, which are recorded at fair value. Accounts Receivable Accounts receivable are recorded at the invoiced amount less allowances for credit losses and sales incentives, do not require collateral and do not bear interest. The allowance for credit losses is established through a provision for net bad debt expense which is recorded in general and administrative expense in the consolidated statements of operations and comprehensive income (loss). The Company determines the adequacy of the allowance for credit losses by evaluating the collectability of accounts, including consideration of the age of invoices, each customer’s expected ability to pay and collection history, customer-specific information, and current economic conditions that may impact the customer's ability to pay. This estimate is periodically adjusted as a result of the aforementioned process, or when the Company becomes aware of a specific customer’s inability to meet its financial obligations. Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalents in several high-quality financial institutions. Cash and cash equivalents held at these banks, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand, and management believes that the financial institutions that hold the Company’s cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to cash. The Company has not experienced any losses in such accounts. As of September 30, 2023, and October 1, 2022, the Company’s customer that accounted for 10% or more of total accounts receivable, net, were as follows: September 30, October 1, Customer A 32 % 34 % The Company’s customer that accounted for 10% or more of total revenue were as follows: Year Ended September 30, October 1, October 2, Customer A 17 % 15 % 14 % Inventories Inventories primarily consist of finished goods and component parts, which are purchased from contract manufacturers and component suppliers. Inventories are stated at lower of cost and net realizable value. Cost is determined using a standard costing method, which approximates first-in first-out. Inventory costs primarily consist of materials, inbound freight, import duties, tariffs, direct labor and manufacturing overhead, logistics, and other handling fees. The Company assesses the valuation of inventory balances including an assessment to determine potential excess and/or obsolete inventory. The Company may be required to write down the value of inventory if estimates of future demand and market conditions indicate excess and/or obsolete inventory. Inventory write-downs and losses on purchase commitments are recorded as a component of cost of revenue in the consolidated statement of operations and comprehensive income (loss). For the fiscal years ended September 30, 2023, and October 1, 2022, losses related to purchase commitments were $ 14.7 million and $ 12.0 million, respectively. Ownership of inventory transfers to the Company based on contractual terms with its contract manufacturers. Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets as follows: Computer hardware and software 1 - 5 years Furniture and fixtures 2 - 5 years Tooling and production line test equipment 2 - 4 years Leasehold improvements 2 - 15 years Product displays 1 - 4 years Costs incurred to improve leased office space are capitalized. Leasehold improvements are amortized on a straight-line basis over the shorter of the term of the lease or the estimated useful life of the improvement. Expenditures for major renewals and improvements that extend the useful lives of property and equipment are capitalized. Maintenance, repair costs and gains or losses associated with disposals are charged to expense as incurred. Product displays are deployed at retail locations. Because the product displays facilitate marketing of the Company’s products within the retail stores, depreciation for product displays is recorded in sales and marketing expenses in the consolidated statements of operations and comprehensive income (loss) . Cloud Computing Arrangements The Company incurs costs to implement cloud computing arrangements that are hosted by a third-party vendor. Implementation costs incurred during the application development stage are capitalized until the software is ready for its intended use. The costs are then amortized on a straight-line basis over the term of the associated hosting arrangement and are recognized as an operating expense within the consolidated statements of operations and comprehensive income (loss). Beginning in fiscal 2020, the Company conducted activities to replace its legacy enterprise resource planning ("ERP") system in order to accommodate the Company's expanding operations and went live with the new ERP in May 2022. Capitalized costs related to cloud computing arrangements, net of accumulated amortization, were $ 18.0 million and $ 21.7 million as of September 30, 2023 and October 1, 2022, respectively, and are reported as a component of other noncurrent assets on the Company's consolidated balance sheets. Amortization expenses for implementation costs for cloud-based computing arrangements for the twelve months ended September 30, 2023, and October 1, 2022, were $ 3.7 million and $ 1.9 million, respectively. Accumulated amortization for cloud-based computing arrangements was $ 6.2 million and $ 2.5 million as of September 30, 2023, and October 1, 2022 , respectively. Impairment of Goodwill and Indefinite-lived Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized and are tested for impairment on an annual basis during the third quarter of each fiscal year or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit or asset below its carrying value. In connection with the Company's evaluation of goodwill impairment, the Company performs a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not conclusive, the Company tests goodwill for impairment, including comparing the fair value of the reporting unit to its carrying value (including attributable goodwill). The Company determines fair value of its reporting unit using an income or market approach incorporating market participant considerations and management’s assumptions on revenue growth rates, operating margins, discount rates and expected capital expenditures. Fair value determinations may include both internal and third-party valuations. In connection with the Company’s evaluation of indefinite-lived intangible asset impairment, the Company performs a qualitative assessment to determine if it is more likely than not that the fair value of the asset is less than its carrying amount. If the qualitative assessment is not conclusive, the Company proceeds to test for impairment by comparing the fair value of the asset to the carrying value. Fair value is determined based on estimated discounted future cash flow analyses that include significant management assumptions such as revenue growth rates, weighted-average costs of capital and assumed royalty rates. If the carrying value exceeds fair value, an impairment charge will be recorded to reduce the asset to fair value. For fiscal years 2023, 2022, and 2021, the Company’s qualitative assessments identified no factors indicating it was more likely than not that the fair value of the Company’s reporting unit and indefinite-lived intangible assets were less than their respective carrying amounts. Therefore, the Company incurred no impairment charges. Impairment of Long-Lived Assets The Company evaluates the recoverability of its long-lived assets, which primarily comprises property and equipment and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company performs impairment testing at the level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability is measured by comparing the carrying amounts to the expected future undiscounted cash flows attributable to the assets. If it is determined that an asset may not be recoverable, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is determined based on estimated discounted future cash flows analyses. There were no impairment charges identified on the Company's long-lived assets during fiscal 2023, 2022, and 2021. Product Warranties The Company’s products are covered by warranty to be free from defects in material and workmanship for a period of one year , except in the EU and select other countries where the Company provides a minimum two-year warranty, depending on the region, on all its products. A t the time of sale, an estimate of future warranty costs is recorded as a component of cost of revenue and a warranty liability is recorded for estimated costs to satisfy the warranty obligation. The Company’s estimate of costs to fulfill its warranty obligations is based on historical experience and expectations of future costs to repair or replace. Legal Contingencies If a potential loss from any claim or legal proceeding is considered probable, and the amount can be reasonably estimated, the Company records a liability for an estimated loss. Legal fees are expensed as incurred and included in general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). Se e Note 12. Commitments and Contingencies for additional information regarding legal contingencies. Treasury Stock The Company accounts for treasury stock acquisitions using the cost method. The Company accounts for the retirement of treasury stock by deducting its par value from common stock and reflecting any excess of cost over par value as a deduction from additional paid-in capital on the consolidated balance sheets. Fair Value Accounting Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level Input Input Definition Level 1 Quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2 Inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities, in active markets or other inputs that are observable or can be corroborated with market data at the measurement date. Level 3 Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. Foreign Currency Certain of the Company’s wholly owned subsidiaries have non-U.S. dollar functional currencies. The Company translates assets and liabilities of non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period and stockholders’ equity at historical rates. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from translation are recognized in foreign currency translation included in accumulated other comprehensive loss. The Company remeasures monetary assets or liabilities denominated in currencies other than the functional currency using exchange rates prevailing on the balance sheet date, and non-monetary assets and liabilities at historical rates. Foreign currency remeasurement and transaction gains and losses are included in other income (expense), net. Foreign currency remeasurement and transaction gains (losses) are recorded in other income (expense), net as follows: September 30, October 1, October 2, (In thousands) Foreign currency remeasurement and transaction gains (losses) $ 13,674 $ ( 21,877 ) $ 2,353 Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company's contracts generally include a combination of products and services. Revenue is allocated to distinct performance obligations and is recognized net of allowances for returns, discounts, sales incentives and any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are not considered a separate performance obligation and are accounted for as a fulfillment cost and are included in cost of revenue. Nature of Products and Services Product revenue primarily includes sales of Sonos speakers and Sonos system products, which include software that enables the Company’s products to operate over a customer’s wireless network, as well as connect to various third-party services, including music and voice. The Company also generates a small portion of revenue from Partner products and other revenue sources in connection with partnerships, accessories, professional services, licensing, advertising, and subscription revenue. Revenue for module units is related to hardware and embedded software that is integrated into final products that are manufactured and sold by the Company's partners. Software primarily consists of firmware embedded in the products and the Sonos app, which is software that can be downloaded to consumer devices at no charge, with or without the purchase of one of the Company’s products. Products and related software are accounted for as a single performance obligation and all intended functionality is available to the customer upon purchase. The revenue allocated to the products and related software is the substantial portion of the total sale price. Product revenue is recognized at the point in time when control is transferred, which is either upon shipment or upon delivery to the customer, depending on delivery terms. Service revenue includes revenue allocated to (i) unspecified software upgrades and (ii) cloud-based services that enable products to access third-party music and voice assistant platforms, based on relative standalone selling price, which are each distinct performance obligations and are provided to customers at no additional charge. Unspecified software upgrades are provided on a when-and-if-available basis and have historically included updates and enhancements such as bug fixes, feature enhancements and updates to the ability to connect to third-party music or voice assistant platforms. Service revenue is recognized ratably over the estimated service period. Significant Judgments The Company’s contracts with customers generally contain promises to transfer products and services as described above. Determining whether products and services are considered distinct performance obligations that should be accounted for separately requires significant judgment. Determining the SSP for each distinct performance obligation requires judgment. The Company estimates SSP for items that are not sold separately, which include the products and related software, unspecified software upgrades and cloud-based services, using information that may include competitive pricing information, where available, as well as analyses of the cost of providing the products or services plus a reasonable margin. In developing SSP estimates, the Company also considers the nature of the products and services and the expected level of future services. Determining the revenue recognition period for unspecified software upgrades and cloud-based services also requires judgment. The Company recognizes revenue attributable to these performance obligations ratably over the best estimate of the period that the customer is expected to receive the services. In developing the estimated period of providing future services, the Company considers past history, plans to continue to provide services, including plans to continue to support updates and enhancements to prior versions of the Company’s products, expected technological developments, obsolescence, competition and other factors. The estimated service period may change in the future in response to competition, technology developments and the Company’s business strategy. The Company offers sales incentives through various programs consisting primarily of discounts, cooperative advertising and market development fund programs. The Company records cooperative advertising and market development fund programs with customers as a reduction to revenue unless it receives a distinct benefit in exchange for credits claimed by the customer and can reasonably estimate the fair value of the benefit received, in which case the Company records it as an expense. The Company recognizes a liability or a reduction to accounts receivable, and reduces revenue based on the estimated amount of sales incentives that will be claimed by customers. Estimates for sales incentives are developed using the most likely amount and are included in the transaction price to the extent that a significant reversal of revenue would not result once the uncertainty is resolved. In developing its estimate, the Company also considers the susceptibility of the incentive to outside influences, the length of time until the uncertainty is resolved and the Company’s experience with similar contracts. Reductions in revenue related to discounts are allocated to products and services on a relative basis based on their respective SSP. Judgment is required to determine the timing and amount of recognition of marketing funds which the Company estimates based on past practice of providing similar funds. The Company accepts returns from direct customers and from certain resellers. To establish an estimate for returns, the Company uses the expected value method by considering a portfolio of contracts with similar characteristics to calculate the historical returns rate. When determining the expected value of returns, the Company considers future business initiatives and relevant anticipated future events. Supplier Concentration The Company relies on third parties for the supply and manufacture of its products, as well as third-party logistics providers for the distribution of its products. In instances where these parties fail to perform their obligations, the Company may be unable to find alternative suppliers or satisfactorily deliver its products to customers on time, if at all. During fiscal 2023, 2022 and 2021, approximately 58 % , 57 % and 59 % , respectively, of the Company’s finished goods purchased during each year were from one vendor. Deferred Revenue and Payment Terms The Company invoices each order upon hardware shipment or delivery and recognizes revenue for each distinct performance obligation when transfer of control has occurred, which in the case of services, may extend over several reporting periods. Amounts invoiced in advance of revenue recognition are recorded as deferred revenue on the consolidated balance sheets. Deferred revenue primarily relates to revenue allocated to unspecified software upgrades and platform services, as well as for newly launched products sold to resellers not recognized until the date of general availability is reached. General availability deferrals are classified as current deferred revenue as the Company starts shipping the product to the reseller within one month prior to the general availability date. The Company classifies deferred revenue as noncurrent if amounts are expected to be recognized as revenue beyond one year from the balance sheet date. Payment Terms Payment terms and conditions vary among the Company’s distribution channels although terms generally include a requirement of payment within 30 days of product shipment. Sales directly to customers from the Company’s website are paid at the time of product shipment. Prior to providing payment terms to customers, an evaluation of the customer’s credit risk is performed. Contractual allowances are an offset to accounts receivable. Research and Development Research and development expenses consist primarily of personnel-related expenses, consulting and outside professional service costs, tooling and prototype materials and overhead costs. Substantially all of the Company’s research and development expenses are related to developing new products and services and improving existing products and services. To date, software development costs have been expensed as incurred because the period between achieving technological feasibility and the release of the software has been short and development costs qualifying for capitalization have been insignificant. In-process research and development ("IPRD") assets represent the fair value of incomplete research and development projects obtained as part of a business combination that have not yet reached technological feasibility and are initially not subject to amortization; rather, these assets are subject to impairment considerations of indefinite-lived intangible assets. Upon completion of development, IPRD assets are considered definite-lived intangible assets, transferred to developed technology and are amortized over their useful lives. If a project were to be abandoned, the IPRD would be considered fully impaired and expensed to research and development. Advertising Costs Advertising costs are expensed as incurred and included in sales and marketing expenses. Advertising expenses were $ 43.9 million, $ 66.6 million and $ 62.3 million for fiscal 2023, 2022 and 2021 , respectively. Restructuring and Related Costs Costs associated with a restructuring plan generally consist of involuntary employee termination benefits, contract termination costs, and other exit-related costs including costs to close facilities. The Company records a liability for involuntary employee termination benefits when management has committed to a plan that establishes the terms of the arrangement and that plan has been communicated to employees. Costs to terminate a contract before the end of the term are recognized on the termination date, and costs that will continue to be incurred in a contract for the remaining term without economic benefit are recognized as of the cease-use date. Restructuring and related costs may also include the write-down of related assets, including operating lease right-of-use assets, when the sale or abandonment of the asset is a direct result of the plan. Other exit-related costs are recognized as incurred. Restructuring and related costs are recognized as an operating expense within the consolidated statements of operations and comprehensive income (loss) and are classified based on the Company's classification policy for each category of operating expense. Stock-Based Compensation The Company measures stock-based compensation cost at fair value on the date of grant. Compensation cost for stock options is recognized, on a straight-line basis, as an expense over the period of vesting as the employee performs the related services, net of estimated forfeitures. The Company estimates the fair value of stock option awards using the Black-Scholes option-pricing model and is based on the Company’s closing stock price on the trading day immediately prior to the date of grant. The Company estimates forfeitures based on expected future terminations and will revise rates, as necessary, in subsequent periods if actual forfeitures differ from initial estimates. The fair value of RSUs is based on the Company's closing stock price on the trading day immediately preceding the date of gran t. The Company estimates the fair value of performance stock units ("PSU") on the grant date and recognizes compensation expense in the period it becomes probable that performance conditions will be achieved. On a quarterly basis, the Company re-evaluates the assumption of the probability that performance conditions will be satisfied and revises its estimates as appropriate as new or updated information becomes available. Retirement Plans The Company has a defined contribution 401(k) plan (the "401(k) Plan") for the Company’s U.S.-based employees, as well as various defined contribution plans for its international employees. Eligible U.S. employees may make tax-deferred contributions under the 401(k) plan, but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code of 1986, as amended (the "Code"). The Company matches contributions towards the 401(k) Plan and international defined contribution plans. The Company's matching contributions totaled $ 9.5 million, $ 8.2 million, and $ 7.6 million for fiscal 2023, 2022, and 2021 , respectively. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income during the period that includes the enactment date. The Company records a valuation allowance when necessary to reduce its deferred tax assets to amounts that are more likely than not to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would result in a benefit to income taxes. The Company records uncertain tax positions in accordance with a two-step process whereby (i) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes in the consolidated statements of operations and comprehensive income (loss). The Company has not incurred any interest or penalties related to unrecognized tax benefits in any of the periods presented. The Company’s provision for (benefit from) income taxes, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits involves the use of estimates, assumptions and judgments. Although the Company believes its estimates, assumptions and judgments to be reasonable, any changes in tax law or its interpretation of tax laws and the resolutions of potential tax audits could significantly impact the amounts provided for income taxes in the Company’s consolidated financial statements. Actual future operating results and the underlying amount and type of income could differ materially from the Company’s estimates, assumptions and judgments thereby impacting the Company’s financial position and results of operations. Segment Information The Company operates as one operating segment as it only reports aggregate financial information on a consolidated basis, accompanied by disaggregated information about revenue by geographic region and product category to its Chief Executive Officer, who is the Company’s chief operating decision maker. Leases The substantial majority of the Company’s leases are for its office spaces and facilities, which are accounted for as operating leases. The Company |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The carrying values of the Company’s financial instruments, including accounts receivable and accounts payable, approximate their fair values due to the short period of time to maturity or repayment. The following table summarizes fair value measurements by level for the assets measured at fair value on a recurring basis as of September 30, 2023, and October 1, 2022: September 30, 2023 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money market funds (cash equivalents) $ 51,522 $ — $ — $ 51,522 October 1, 2022 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money market funds (cash equivalents) $ 187,170 $ — $ — $ 187,170 |
Revenue and Geographic Informat
Revenue and Geographic Information | 12 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Geographic Information | 4. Revenue and Geographic Information Disaggregation of Revenue Revenue by geographical region also includes the applicable service revenue for software upgrades and cloud-based services attributable to each region and is based on ship-to address, is as follows: September 30, October 1, October 2, (In thousands) Americas $ 1,048,245 $ 1,044,113 $ 980,931 Europe, Middle East and Africa ("EMEA") 518,179 578,034 618,476 Asia Pacific ("APAC") 88,831 130,189 117,337 Total revenue $ 1,655,255 $ 1,752,336 $ 1,716,744 Revenue is attributed to individual countries based on ship-to address and also includes the applicable service revenue for software upgrades and cloud-based services attributable to each country. Revenue by significant countries is as follows: September 30, October 1, October 2, (In thousands) United States $ 971,151 $ 964,118 $ 890,837 Other countries 684,104 788,218 825,907 Total revenue $ 1,655,255 $ 1,752,336 $ 1,716,744 Revenue by product category also includes the applicable service revenue for software upgrades and cloud-based services attributable to each product category. Revenue by major product category is as follows: September 30, October 1, October 2, (In thousands) Sonos speakers $ 1,293,440 $ 1,368,916 $ 1,378,808 Sonos system products 285,064 297,110 265,180 Partner products and other revenue 76,751 86,310 72,756 Total revenue $ 1,655,255 $ 1,752,336 $ 1,716,744 Disaggregation of Property and Equipment Property and equipment, net by country as of September 30, 2023, and October 1, 2022 were as follows: September 30, October 1, (In thousands) China $ 32,045 $ 40,609 United States 30,430 30,870 Other countries 24,600 14,689 Property and equipment, net $ 87,075 $ 86,168 |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | 5. Balance Sheet Components The following tables show the Company’s balance sheet component details. Accounts Receivable Allowances The following table summarizes changes in the allowance for credit losses for fiscal 2023, 2022 and 2021: September 30, October 1, October 2, (In thousands) Beginning balance $ 2,744 $ 1,547 $ 1,307 Increases 1,561 2,098 1,529 Write-offs ( 1,594 ) ( 901 ) ( 1,289 ) Ending balance $ 2,711 $ 2,744 $ 1,547 The following table summarizes the changes in the allowance for sales incentives for fiscal 2023, 2022 and 2021: September 30, October 1, October 2, (In thousands) Beginning balance $ 23,573 $ 19,160 $ 17,515 Charged to revenue 139,657 51,225 95,249 Utilization of sales incentive allowance ( 134,155 ) ( 46,812 ) ( 93,604 ) Ending balance $ 29,075 $ 23,573 $ 19,160 Inventories Inventories, net, consist of the following: September 30, October 1, (In thousands) Finished goods $ 281,571 $ 406,657 Components 64,950 47,631 Inventories $ 346,521 $ 454,288 The Company writes down inventory as a result of excess and obsolete inventories, or when it believes that the net realizable value of inventories is less than the carrying value. As of September 30, 2023, and October 1, 2022, inventory write-downs were $ 29.7 million and $ 8.8 million, respectively. Property and Equipment, Net Property and equipment, net consist of the following: September 30, October 1, (In thousands) Computer hardware and software $ 41,679 $ 42,000 Furniture and fixtures 6,971 7,511 Tooling and production line test equipment 108,693 100,337 Leasehold improvements 53,648 49,656 Product displays 68,771 56,885 Total property and equipment 279,762 256,389 Accumulated depreciation and amortization ( 192,687 ) ( 170,221 ) Property and equipment, net $ 87,075 $ 86,168 Depreciation expense was $ 42.7 million, $ 33.3 million and $ 31.8 million for fiscal 2023, 2022 and 2021, respectively. During fiscal 2023, 2022 and 2021, the Company abandoned and disposed of gross fixed assets of $ 21.3 million, $ 18.9 million and $ 32.9 million, with accumulated depreciation of $ 21.1 million, $ 18.8 million and $ 32.2 million, respectively. Disposals of fixed assets were recorded in operating expenses in the consolidated statements of operations and comprehensive income (loss) and resulted in immaterial losses for fiscal 2023, 2022 and 2021. Goodwill The following table presents the changes in carrying amount of goodwill for the fiscal year ended September 30, 2023: (In thousands) Balance as of October 1, 2022 $ 77,300 Effect of exchange rate changes on goodwill 3,120 Balance as of September 30, 2023 $ 80,420 Intangible Assets As part of the acquisition of Mayht Holding BV ("Mayht") in fiscal 2022, the Company recognized $ 71.8 million in intangible assets related to in-process research and development activity, which is not subject to amortization for the current period. Th e following table reflects the changes in the net carrying amount of the components of intangible assets associated with the Company's acquisition activity: September 30, 2023 Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Value Weighted-Average Remaining Life (In thousands, except weighted-average remaining life) Tradename $ 451 $ ( 113 ) $ ( 12 ) $ 326 4.50 Technology-based 31,480 ( 11,588 ) - 19,892 4.89 Total finite-lived intangible assets 31,931 ( 11,701 ) ( 12 ) 20,218 4.88 In-process research and development and other intangible 71,759 - ( 1,968 ) 69,791 Total intangible assets $ 103,690 $ ( 11,701 ) $ ( 1,980 ) $ 90,009 The following table summarizes the estimated future amortization expense of the Company's intangible assets as September 30, 2023: Fiscal years ending Future Amortization Expense (In thousands) 2024 $ 5,969 2025 3,367 2026 3,038 2027 3,022 2028 and thereafter 4,822 Total future amortization expense $ 20,218 Accrued Expenses Accrued expenses consisted of the following: September 30, October 1, (In thousands) Accrued inventory and supply chain costs $ 48,384 $ 51,011 Accrued advertising and marketing 13,029 21,292 Accrued taxes 11,410 7,081 Accrued general and administrative expenses 9,924 21,634 Accrued product development 4,298 8,168 Other accrued payables 2,672 104 Total accrued expenses $ 89,717 $ 109,290 Deferred Revenue Amounts invoiced in advance of revenue recognition are recorded as deferred revenue on the consolidated balance sheets. For the fiscal year ended September 30, 2023, deferred revenue included revenue allocated to unspecified software upgrades and cloud-based services of $ 80.0 million. For the fiscal year ended October 1, 2022, deferred revenue included revenue allocated to unspecified software upgrades and cloud-based services of $ 73.8 million, as well as current deferred revenue related to newly launched products sold to resellers not recognized as revenue until the date of general availability was reached. The following table presents the changes in the Company's deferred revenue balances for the fiscal years ended September 30, 2023, October 1, 2022, and October 2, 2021: September 30, October 1, October 2, (In thousands) Deferred revenue, beginning of period $ 83,470 $ 89,498 $ 62,389 Recognition of revenue included in beginning of period deferred revenue ( 27,057 ) ( 41,438 ) ( 19,175 ) Revenue deferred, net of revenue recognized on contracts in the respective period 24,425 35,410 46,284 Deferred revenue, end of period $ 80,838 $ 83,470 $ 89,498 The Company expects the following recognition of deferred revenue as of September 30, 2023: For the fiscal years ending 2024 2025 2026 2027 2028 and Beyond Total (In thousands) Revenue expected to be recognized $ 20,188 $ 17,086 $ 14,718 $ 12,088 $ 16,758 $ 80,838 Other Current Liabilities Other current liabilities consist of the following: September 30, October 1, (In thousands) Reserve for returns $ 21,462 $ 18,263 Short-term operating lease liabilities 1,153 10,532 Warranty liability 7,466 5,771 Other 4,172 5,083 Total other current liabilities $ 34,253 $ 39,649 The following table presents the changes in the Company’s warranty liability for the fiscal years ended September 30, 2023, and October 1, 2022: September 30, October 1, (In thousands) Warranty liability, beginning of period $ 5,771 $ 5,604 Provision for warranties issued during the period 12,517 13,033 Settlements of warranty claims during the period ( 10,822 ) ( 12,866 ) Warranty liability, end of period $ 7,466 $ 5,771 |
Leases
Leases | 12 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | 6. Leases The Company entered into various non-cancelable lease agreements for offices and facilities, as well as auto leases. The substantial majority of the Company's leases are for its office spaces and facilities, which are accounted for as operating leases. The Company leases office space in California, as well as offices in various locations in the U.S., with additional sales, operations, and research and development offices around the world. The Company determines whether an arrangement is a lease at inception if there is an identified asset, and it has the right to control the identified asset for a period of time. Some of the Company's leases include options to extend the lease for up to 5 years, and some include options to terminate the lease within 1 year. The Company's lease terms are only for periods in which it has enforceable rights and are impacted by options to extend or terminate the lease only when it is reasonably certain that the Company will exercise the option. For leases with terms greater than 12 months, the Company records the related right-of-use asset and lease obligation at the present value of lease payments over the lease terms. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the lease term. The Company's leases do not include any residual value guarantees or bargain purchase options. Lease agreements will typically exist with lease and non-lease components, which are accounted for separately. The Company's agreements may contain variable lease payments. The Company includes variable lease payments that depend on an index or a rate and exclude those which depend on facts or circumstances occurring after the commencement date, other than the passage of time. Most of the Company's leases do not contain an implicit interest rate. Therefore, the Company uses judgment to estimate an incremental borrowing rate, which is defined as the rate of interest the Company would have to pay to borrow an amount that is equal to the lease obligations, on a collateralized basis, and over a similar term. The Company takes into consideration the terms of the Company's Credit Facility (as defined in Note 7. Debt), lease terms, and current interest rates to determine the incremental borrowing rate at lease commencement date. At September 30, 2023, the Company's weighted-average discount rate was 5.14 % , while the weighted-average remaining lease term was 9.1 years. As part of the supplemental cash flow disclosure, the right-of-use assets obtained in exchange for new operating lease liabilities does not reflect the impact of prepaid or deferred rent. On May 11, 2023, the Company amended its existing operating lease at the Lafayette City Center in Boston, Massachusetts. The effect of the modification was a partial reduction in the square footage of the lease and an extension of the lease term through July 2035 . The modification resulted in the Company continuing to classify the lease as an operating lease, with an increase in right-of-use assets and lease liabilities totaling $ 31.6 million and $ 30.4 million, respectively. On July 13, 2023, as part of the Company's ongoing evaluation of real estate needs and overall lease consolidation initiatives, the Company entered into a lease agreement for a new headquarters location for approximately 50,000 square feet of office space located in Goleta, California. The lease expires in May 2031 , with no option to extend . The Company anticipates taking possession of the leased premises in October 2023 and intends to relocate its headquarters to this space in fiscal 2024. Refer to Note 14. Restructuring Plan for discussion of the impact of lease abandonment charges. The components of lease expense for the fiscal year ended September 30, 2023, was as follows: Year Ended September 30, 2023 (In thousands) Operating lease cost $ 12,324 Short-term lease cost 340 Variable lease cost 5,480 Total lease cost $ 18,144 For the fiscal years ended September 30, 2023, and October 1, 2022, rent expense, including leases for offices and facilities as well as auto leases, was $ 12.7 million and $ 11.3 million, respectively, and common area maintenance expense was $ 5.5 million and $ 4.3 million, respectively. The following table summarizes the maturity of lease liabilities under operating leases as of September 30, 2023: Fiscal years ending Operating leases (In thousands) 2024 $ 4,415 2025 9,579 2026 7,888 2027 6,395 2028 5,841 Thereafter 41,040 Total lease payments 75,158 Less imputed interest ( 19,049 ) Total lease liabilities $ 56,109 |
Debt
Debt | 12 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 7. Debt On October 13, 2021, the Company entered into a Revolving Credit Agreement with JPMorgan Chase Bank, N.A., as the administrative agent, and the lenders party thereto (the "Revolving Credit Agreement"). The Revolving Credit Agreement provides for (i) a five-year senior secured revolving credit facility in the amount of up to $ 100.0 million and (ii) an uncommitted incremental facility subject to certain conditions. Proceeds are to be used for working capital and general corporate purposes. In June 2023, the Company amended the Revolving Credit Agreement, replacing prior references to LIBOR with references to SOFR a result of the discontinuation of LIBOR. The facility may be drawn as an Alternative Base Rate Loan (at 1.00 % plus an applicable margin) or Term Benchmark Loan (at the Term SOFR Rate, plus the applicable Term SOFR Adjustment ranging from 0.11 % to 0.43 %, plus an applicable margin (in total, "Adjusted Term SOFR")). The Company must also pay (i) an unused commitment fee ranging from 0.200 % to 0.275 % per annum of the average daily unused portion of the aggregate revolving credit commitment under the agreement and (ii) a per annum fee equal to the applicable margin over Adjusted Term SOFR multiplied by the aggregate face amount of outstanding letters of credit. As of September 30, 2023, the Company did not have any outstanding borrowings and had $ 1.8 million in undrawn letters of credit that reduce the availability under the Revolving Credit Agreement. The Company’s obligations under the Revolving Credit Agreement are secured by substantially all of the Company’s assets. The Revolving Credit Agreement contains customary representations and warranties, customary affirmative and negative covenants, a financial covenant that is tested quarterly and requires the Company to maintain a certain consolidated leverage ratio, and customary events of default. As of September 30, 2023 , the Company was in compliance with all financial covenants under the Revolving Credit Agreement. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders' Equity Share Repurchase Program On November 16, 2022, the Board of Directors authorized a common stock repurchase program of up to $ 100.0 million. During the fiscal year ended September 30, 2023, the Company repurchased 6,555,702 shares for an aggregate purchase price of $ 100.0 million at an average price of $ 15.25 per share under the repurchase program. As of September 30, 2023, the Company fully utilized the amount available under this stock repurchase program. Treasury stock during the fiscal year ended September 30, 2023, included shares withheld to satisfy employees' tax withholding requirements in connection with vesting of RSUs. Additionally, during the fiscal year ended September 30, 2023, the Company retired 6,138,129 shares of treasury stock. The Company accounts for the retirement of treasury stock by deducting its par value from common stock and reflecting any excess of cost over par value as a deduction from additional paid-in-capital on the consolidated balance sheets. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 9. Stock-Based Compensation 2018 Equity Incentive Plan In July 2018, the Board of Directors (the "Board") adopted the 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan became effective in connection with the Company's initial public offering ("IPO"). The number of shares reserved for issuance under the 2018 Plan increases automatically on January 1 of each year beginning in 2019 and continuing through 2028 by a number of shares of common stock equal to the lesser of (x) 5 % of the total outstanding shares of the Company’s common stock and common stock equivalents as of the immediately preceding December 31 (rounded to the nearest whole share) and (y) a number of shares determined by the Company's the Board. As of September 30, 2023, there were 42,317,925 shares reserved for future issuance under the 2018 Plan. Stock Options Pursuant to the 2018 Plan, the Company issues stock options to employees and directors. The option price, number of shares and grant date are determined at the discretion of the Board. For so long as the option holder performs services for the Company, the options generally vest over 48 months, on a monthly or quarterly basis, with certain options subject to an initial annual cliff vest, and are exercisable for a period not to exceed ten years from the date of grant. The Company’s policy for issuing stock upon stock option exercise is to issue new common stock. The summary of the Company’s stock option activity is as follows: Number of Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at October 1, 2022 10,802,882 $ 13.37 4.5 $ 10,956 Exercised ( 2,005,776 ) $ 10.64 Forfeited ( 247,149 ) $ 14.20 Outstanding at September 30, 2023 8,549,957 $ 13.99 3.6 $ 1,689 At September 30, 2023 Options exercisable 8,549,957 $ 13.99 3.6 $ 1,689 Options vested and expected to vest 8,549,957 $ 13.99 3.6 $ 1,689 The Company granted no options in fiscal 2023, 2022, and 2021. Options vested in fiscal 2023, 2022 and 2021, respectively, have a fair value of $ 2.6 million, $ 6.6 million, and $ 10.8 million. As of September 30, 2023, all outstanding stock options have vested and the Company had no unrecognized stock-based compensation expense related to stock options. As of October 1, 2022, the Company had $ 0.4 million of unrecognized stock-based compensation expense related to stock options, which were expected to be recognized over a weighted-average period of 0.2 years. The total intrinsic value of stock options exercised was $ 15.3 million, $ 58.0 million and $ 242.7 million for fiscal 2023, 2022 and 2021, respectively. Restricted Stock Units Pursuant to the 2018 Plan, the Company issues RSUs to employees and directors. RSUs vest quarterly over the service period, which is generally four years with certain awards subject to an initial annual cliff vest. The summary of the Company’s RSU activity is as follows: Number of Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value (In thousands) Outstanding at October 1, 2022 8,308,177 $ 19.25 $ 115,484 Granted 5,272,828 $ 17.33 Released ( 4,458,367 ) $ 16.66 Forfeited ( 1,460,603 ) $ 19.34 Outstanding at September 30, 2023 7,662,035 $ 19.42 $ 98,917 At September 30, 2023 Units expected to vest 6,618,791 $ 19.39 $ 85,449 As of September 30, 2023 and October 1, 2022, the Company had $ 111.6 million and $ 120.6 million of unrecognized stock-based compensation expense related to RSUs, each of which are expected to be recognized over a weighted-average period of 2.4 and 2.5 years, respectively. Performance Stock Units Pursuant to the 2018 Plan, the Company has issued and may issue certain PSUs that vest on the satisfaction of service and performance conditions. The number of shares vested at the end of the performance period are based on the extent to which the corresponding performance goals have been achieved. The number of shares vested during the twelve months ended September 30, 2023, includes performance achievement adjustments of a net reduction of 12,895 units. The summary of the Company’s PSU activity is as follows: Number of Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value (In thousands) Outstanding at October 1, 2022 398,077 $ 26.96 $ 5,533 Granted 249,370 $ 17.54 Released ( 263,158 ) $ 26.26 Forfeited ( 119,098 ) $ 21.45 Outstanding at September 30, 2023 265,191 $ 21.27 $ 3,424 As of September 30, 2023 and October 1, 2022, the Company had $ 0.3 million and $ 0.4 million of unrecognized stock-based compensation expense related to PSUs, which is expected to be recognized over a weighted-average period of 1.2 and 0.6 years, respectively. Stock-based Compensation Total stock-based compensation expense by function category was as follows: September 30, October 1, October 2, (In thousands) Cost of revenue $ 2,038 $ 1,620 $ 988 Research and development 35,530 30,724 25,075 Sales and marketing 15,677 15,335 13,570 General and administrative 23,612 27,961 22,494 Total stock-based compensation expense $ 76,857 $ 75,640 $ 62,127 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. Income Taxes The Company’s income before provision for (benefit from) income taxes for fiscal 2023, 2022 and 2021 were as follows: September 30, October 1, October 2, (In thousands) Domestic $ ( 9,904 ) $ 54,609 $ 126,810 Foreign 14,298 14,121 30,115 Income before provision for (benefit from) income taxes $ 4,394 $ 68,730 $ 156,925 Components of the provision for (benefit from) income taxes consisted of the following: September 30, October 1, October 2, (In thousands) Current: U.S. Federal $ 7,507 $ — $ — U.S. State 4,947 483 440 Foreign 2,810 3,401 6,216 Total current 15,264 3,884 6,656 Deferred: U.S. Federal — ( 1,459 ) — U.S. State — ( 21 ) — Foreign ( 596 ) ( 1,057 ) ( 8,326 ) Total deferred ( 596 ) ( 2,537 ) ( 8,326 ) Provision for (benefit from) income taxes $ 14,668 $ 1,347 $ ( 1,670 ) The Company is subject to income taxes in the United States and foreign jurisdictions in which it operates. The Company’s tax provision is impacted by the jurisdictional mix of earnings as its foreign subsidiaries have statutory tax rates different from those in the United States. For the year ended September 30, 2023 the Company’s U.S. tax expense was adversely impacted by the requirement to capitalize and amortize research and development expenses under Section 174 as the Company recorded a current U.S. tax expense with no corresponding deferred tax benefit due to the valuation allowance maintained against its U.S. deferred tax assets. Components of the Company’s deferred income tax assets and liabilities are as follows: September 30, October 1, (In thousands) Deferred tax assets Research & development tax credit carryforwards $ 75,593 $ 92,487 Capitalized research & development 63,395 9,420 Accrued expenses and reserves 17,837 8,872 Deferred revenue 15,855 14,170 Operating lease liability 13,097 7,717 Stock-based compensation 7,727 9,261 Foreign net operating loss carryforwards 7,606 7,702 Other capitalized costs 5,364 3,799 Depreciation 2,700 2,239 U.S. net operating loss carryforwards 1,852 26,363 Other 494 182 Total deferred tax assets 211,520 182,212 Valuation allowance ( 185,840 ) ( 162,267 ) Deferred tax assets, net of valuation allowance 25,680 19,945 Deferred tax liabilities Intangibles ( 22,475 ) ( 22,125 ) Right-of-use asset ( 11,392 ) ( 5,940 ) Other — ( 14 ) Total deferred tax liabilities ( 33,867 ) ( 28,079 ) Net deferred tax assets (liabilities) $ ( 8,187 ) $ ( 8,134 ) Reported as Deferred tax assets $ 1,659 $ 1,508 Deferred tax liabilities ( 9,846 ) ( 9,642 ) Net deferred tax assets (liabilities) $ ( 8,187 ) $ ( 8,134 ) The Company has assessed, on a jurisdictional basis, the realization of its net deferred tax assets, including the ability to carry back net operating losses, the existence of taxable temporary differences, the availability of tax planning strategies and available sources of future taxable income. The Company has concluded that based on cumulative taxable income and future taxable income that it is able to realize a benefit for net deferred tax assets in certain foreign jurisdictions. In addition, the Company has concluded that a valuation allowance on its net deferred tax assets in the U.S. and certain foreign jurisdictions continues to be appropriate considering cumulative taxable losses in recent years and uncertainty with respect to future taxable income. It is possible that within the next 12 months there may be sufficient positive evidence to release a portion or all of the remaining valuation allowance in the U.S. and certain foreign jurisdictions. Release of the remaining valuation allowance would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings. The timing and amount of the potential valuation allowance release are subject to significant management judgment, as well as prospective earnings in the United States and certain other foreign entities and jurisdictions. For the year ended September 30, 2023, we utilized $ 84.9 million U.S. federal net operating loss and have no U.S. federal net operating loss carryforwards remaining. As of September 30, 2023, we had gross state net operating loss carryforwards of $ 25.4 million, which expire beginning in 2032, as well as $ 46.9 million in foreign net operating loss carryforwards with an indefinite life. As of September 30, 2023, we also had U.S. federal research and development tax credit carryforwards as filed of $ 54.4 million, and state research and development tax credit carryforwards as filed of $ 47.0 million, which will expire beginning in 2038 and 2025, respectively. The federal and state research and development tax credits are shown net of uncertain tax positions and net of federal benefit, as applicable, in the components of the Company's deferred income tax assets and liabilities. For the year ended September 30, 2023, the increase in capitalized research and development relates to the requirement to capitalize research and development expenses under Section 174. Because of the change of ownership provisions of Sections 382 and 383 of the Internal Revenue Code, and similar state provisions, use of a portion of the Company’s U.S. federal and state net operating loss and research and development tax credit carryforwards may be limited in future periods if there are future changes in ownership. Further, a portion of the carryforwards may expire before being applied to reduce future taxable income and income tax liabilities if sufficient taxable income is not generated in future periods. The following table summarizes changes in the valuation allowance for fiscal 2023, 2022 and 2021: September 30, October 1, October 2, (In thousands) Beginning balance $ 162,267 $ 155,978 $ 113,939 Increase during the period 23,628 13,841 49,791 Decrease during the period ( 55 ) ( 7,552 ) ( 7,752 ) Ending balance $ 185,840 $ 162,267 $ 155,978 Reconciliation of U.S. statutory federal income taxes to the Company’s provision for (benefit from) income taxes is as follows: September 30, October 1, October 2, (In thousands) U.S. federal income taxes at statutory rate $ 923 $ 14,433 $ 32,954 U.S. state and local income taxes, net of federal benefit and state credits ( 841 ) ( 2,594 ) ( 9,473 ) Foreign income tax rate differential 734 970 1,430 Stock-based compensation 104 ( 15,532 ) ( 47,496 ) Federal research and development tax credits ( 7,591 ) ( 8,983 ) ( 21,535 ) Unrecognized federal tax benefits 184 ( 2,482 ) 4,041 Change in tax rate — 5,013 ( 2,681 ) Global intangible low taxed income, net of foreign tax credits 1,234 290 — Foreign -derived intangible income (FDII) deduction ( 6,863 ) — — Subpart F income 1,374 — — 162(m) executive compensation limitation 2,513 2,574 — Other ( 695 ) 1,079 ( 565 ) Change in valuation allowance 23,592 6,579 41,655 Provision for income taxes $ 14,668 $ 1,347 $ ( 1,670 ) Change in gross unrecognized tax benefits, excluding interest and penalties, as a result of uncertain tax positions are as follows: September 30, October 1, October 2, (In thousands) Beginning balance $ 17,021 $ 21,252 $ 14,721 Decrease - tax positions in prior periods ( 566 ) ( 6,039 ) ( 4 ) Increase - tax positions in current periods 1,164 1,808 6,535 Ending balance $ 17,619 $ 17,021 $ 21,252 The Company does not anticipate changes to its unrecognized benefits within the next 12 months that would result in a material change to the Company’s financial position. The unrecognized tax benefits as of September 30, 2023, would have no impact on the effective tax rate if recognized The Company conducts business in a number of jurisdictions and, as such, is required to file income tax returns in multiple jurisdictions globally. U.S. federal income tax returns for the 2019 tax year and earlier are no longer subject to examination by the U.S. Internal Revenue Service (the "IRS"). All U.S. federal and state net operating losses as well as research and development tax credits generated to date, including 2019 and earlier, used in open tax years are subject to adjustment by the IRS and state tax authorities. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. There were no accrued interest or penalties as of September 30, 2023, and October 1, 2022. As of September 30, 2023, the Company continues to assert that the unremitted earnings in our foreign subsidiaries are permanently reinvested and therefore no deferred taxes or withholding taxes have been provided. If, in the future, the Company decides to repatriate its $ 6.4 million of undistributed earnings from these subsidiaries in the form of dividends or otherwise, the Company could be subject to withholding taxes payable at that time. Outside basis differences in the Company's foreign subsidiaries including unremitted earnings and any related taxes are not material. |
Net Income (Loss) Per Share Att
Net Income (Loss) Per Share Attributable to Common Stockholders | 12 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share Attributable to Common Stockholders | 11. Net Income (Loss) Per Share Attributable to Common Stockholders Basic net income (loss) per share attributable to common stockholders is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding less shares subject to repurchase. Diluted net income (loss) per share attributable to common stockholders adjusts the basic net income (loss) per share attributable to common stockholders and the weighted-average number of shares of common stock outstanding for the potentially dilutive impact of stock awards, using the treasury stock method. The following table sets forth the computation of the Company’s basic and di luted net income (loss) per share attributable to common stockholders: September 30, October 1, October 2, (In thousands, except share and per share data) Numerator: Net income (loss) attributable to common stockholders - basic and diluted $ ( 10,274 ) $ 67,383 $ 158,595 Denominator: Weighted-average shares of common stock - basic 127,702,885 127,691,030 122,245,212 Effect of potentially dilutive stock options — 5,472,807 10,120,238 Effect of RSUs — 4,385,406 7,875,245 Effect of PSUs — 212,835 68,457 Weighted-average shares of common stock—diluted 127,702,885 137,762,078 140,309,152 Net income (loss) per share attributable to common stockholders: Basic $ ( 0.08 ) $ 0.53 $ 1.30 Diluted $ ( 0.08 ) $ 0.49 $ 1.13 The foll owing potentially dilutive shares as of the end of each period presented were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been antidilutive: September 30, October 1, October 2, Stock options to purchase common stock 9,449,904 6,877,530 9,030,004 Restricted stock units 9,742,444 5,041,645 3,505,140 Performance stock units 149,991 88,672 55,586 Total 19,342,339 12,007,847 12,590,730 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Commitments to suppliers The Company utilizes contract manufacturers to build its products. These contract manufacturers acquire components and build products based on demand forecast information the Company supplies, which typically covers the fiscal year. Consistent with industry practice, the Company acquires inventories from such manufacturers through blanket purchase orders against which orders are applied based on projected demand information and availability of goods. Such purchase commitments typically cover the Company's forecasted product and manufacturing requirements for periods that range a number of months. In certain instances, these agreements allow the Company the option to cancel, reschedule, and/or adjust our requirements based on its business needs for a period of time before the order is due to be fulfilled. The Company's purchase orders typically are not cancellable in the event of a demand plan change or other circumstances, such as where the supplier has procured unique, Sonos-specific designs, and/or specific non-cancellable, non-returnable components based on our provided forecasts. As of September 30, 2023, the Company's open purchase orders to contract manufacturers for finished goods were approximately $ 70 million , the majority of which are expected to be paid in the next six months . As of September 30, 2023, the Company's expected commitments to suppliers for components were in the range of $ 226 million to $ 256 million, the majority of which is expected to be paid and/or utilized by our contract manufacturers in building finished goods within the next two years . The expected commitments are subject to change as a result of fluctuations in the demand forecast, as well as ongoing negotiations with contract manufacturers and suppliers. These commitments are related to components that can be specific to Sonos products and comprised 1) indirect obligations to third-party manufacturers and suppliers, 2) the inventory owned by contract manufacturers procured to manufacture Sonos products, and 3) purchase commitments made by contract manufacturers to their upstream suppliers. Legal Proceedings From time to time, the Company is involved in legal proceedings in the ordinary course of business, including claims relating to employee relations, business practices, and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict, and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company’s operations or its financial position, liquidity or results of operations. The Company’s Lawsuits Against Google: On January 7, 2020, the Company filed a complaint with the U.S. International Trade Commission ("ITC") against Alphabet Inc. ("Alphabet") and Google LLC ("Google") and a counterpart lawsuit in the U.S. District Court for the Central District of California against Google. The complaint and lawsuit each allege infringement by Alphabet and Google of certain Sonos patents related to its smart speakers and related technology. The counterpart lawsuit is stayed pending completion of the ITC investigation and appeal thereof. The ITC concluded its investigation in January 2022, finding all five of the Company’s asserted patents to be valid and infringed by Google, and further finding that one redesign per patent proposed by Google would avoid infringement. The ITC issued a limited exclusion order and a cease-and-desist order with respect to Google’s infringing products. The outcome of the ITC investigation is currently being appealed by the Company and Google. On September 29, 2020, the Company filed another lawsuit against Google alleging infringement of additional Sonos patents and seeking monetary damages and other non-monetary relief. A jury trial was held in May 2023, which found one Sonos patent to be infringed and another Sonos patent not infringed, and returned an award of $ 32.5 million based on a royalty rate of $ 2.30 per infringing unit. After trial, the court held Sonos’ patents unenforceable under the doctrine of prosecution laches and invalid as a result of amendments made during prosecution. The Company is appealing the ruling. On December 1, 2020, the Company filed a lawsuit against two Google foreign subsidiaries in the regional court of Hamburg, Germany, alleging infringement of a Sonos patent seeking non-monetary relief. The Company has since withdrawn this action after having received some preliminary relief. Google’s Lawsuits Against the Company: On June 11, 2020, Google filed a lawsuit in the U.S. District Court for the Northern District of California against the Company alleging infringement by the Company of five Google patents and seeking monetary damages and other non-monetary relief. Four of these patents have since been found invalid by the Court or by the U.S. Patent and Trademark Office, or have been withdrawn from the case by Google. In this lawsuit, one patent remains asserted against the Company. No trial date is set. On June 12, 2020, Google filed lawsuits in District Court Munich I against Sonos Europe B.V. and Sonos, Inc., alleging infringement of two Google patents seeking monetary damages and an injunction preventing sales of allegedly infringing products. In March 2021, the District Court Munich stayed the case for infringement of one Google patent pending the outcome of a nullity action concerning the validity of that patent. In June 2021, the Munich court issued a decision dismissing Google's complaint regarding the other Google patent for lack of infringement by the Company. Google has appealed the Munich court's ruling, which is pending. On August 21, 2020, Google filed a lawsuit against the Company in Canada alleging infringement of one Google patent. On July 26, 2022, the Canadian court ruled that the Company does not infringe this patent after a trial on the merits. Google has appealed the Canadian’s court’s ruling, which is pending. On August 21, 2020, Google filed a lawsuit against Sonos Europe B.V. and Sonos, Inc. in France, alleging infringement of two Google patents seeking monetary damages and an injunction preventing sales of allegedly infringing products. In February 2021, Google withdrew its infringement allegations regarding one patent in view of prior art brought to the attention of the court by the Company. In March 2022, the French trial court ruled for the Company on one of Google's asserted patents. The French trial court found the other Google patent invalid in November 2023. Google has appealed the French trial court's March 2022 ruling, which is pending. On August 21, 2020, Google filed a lawsuit against Sonos Europe B.V. and Sonos, Inc. in the Netherlands alleging infringement of a Google patent seeking an injunction preventing sales of allegedly infringing products. In October, 2022, the Netherlands court ruled that the Company does not infringe Google’s patent. In September 2020, Google filed a lawsuit against Sonos Europe B.V. in the Netherlands, alleging infringement of a Google patent and seeking an injunction preventing sales of allegedly infringing products. In February 2022, the Court rejected Google's claims concerning this patent. Google has appealed this decision, which is pending. On August 8, 2022, Google filed two c omplaints with t he ITC against the Company and two counterpart lawsuits in the Northern District of California against the Company, collectively alleging infringement by the Company of seven Google patents generally related to wireless charging, device setup, and voice control, and seeking monetary damages and other non-monetary relief. The counterpart lawsuits are stayed pending completion of the ITC investigations. The ITC has terminated the investigation as to one Google patent as a result of imminent expiration of that Google patent. An oral hearing in the first ITC investigation took place in June 2023, with the administrative law judge issuing an initial determination of no violation by the Company. Google is seeking internal Commission review of the initial determination with a final decision by the Commission scheduled for January 2024. The oral hearing in the second ITC investigation has been postponed after the administrative law judge has indicated that she will be invalidating both Google patents at issue. Implicit On March 10, 2017, Implicit, LLC (“Implicit”) filed a patent infringement action in the United States District Court, District of Delaware against the Company. Implicit is asserting that the Company has infringed on certain claims of two patents in this case. The Company denies the allegations. The claims at issue have been held unpatentable by the USPTO. Implicit has appealed this ruling, which will be heard by the appeals court in 2024. There is no assurance of a favorable outcome and the Company’s business could be adversely affected as a result of a finding that the Company patents-in-suit are invalid and/or unenforceable. A range of loss, if any, associated with this matter is not probable or reasonably estimable as of September 30, 2023. The Company is involved in certain other litigation matters not listed above but does not consider these matters to be material either individually or in the aggregate at this time. The Company’s view of the matters not listed may change in the future as the litigation and events related thereto unfold. Tariff refunds On May 13, 2020, the Company was granted a temporary exclusion from the August 2019 Section 301 Tariff Action (List 4A) ("Section 301 tariffs"), eliminating the tariffs on the Company's component products imported from China until August 31, 2020. The exclusion for the Company’s component products was not extended past August 31, 2020, with the Section 301 tariffs for our component products automatically reinstated on September 1, 2020. On July 23, 2020, the Company was granted a temporary exclusion from Section 301 tariffs, eliminating the tariffs on the Company’s core speaker products imported from China until August 31, 2020. These exemptions entitled the Company to refunds for tariffs paid from September 2019 through December 2020. On August 28, 2020, the United States Trade Representative granted an extension through December 31, 2020 of the exclusion for the Company’s core speaker products, with the Section 301 tariffs for our core speaker products automatically reinstated on January 1, 2021. On March 23, 2022, the Company was granted an exclusion extension from the Section 301 tariffs, eliminating tariffs on the Company’s core speaker products, including certain new product introductions, imported from China from April 13, 2022 through December 31, 2022. This exemption entitled the Company to refunds for tariffs paid from October 12, 2021 through April 12, 2022. For fiscal 2023 and 2022, the Company recognized $ 10.4 million and $ 15.8 million, respectively, in refunds based upon acceptance of the Company's refund request, recognized as a reduction to cost of revenue. As of September 30, 2023, the remaining refunds the Company expected to recover were minimal for tariffs paid from September 2019 through December 2020, and from October 12, 2021 through April 12, 2022. The Company did not record these potential refunds due to uncertainty of the timing of acceptance of approval, but such refunds will be recognized as a reduction to cost of revenue if and when acceptance occurs. Guarantees and Indemnifications In the normal course of business, the Company enters into agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. To date, the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by the Delaware General Corporation Law. The Company also currently has directors’ and officers’ insurance. No amount has been accrued in the consolidated financial statements with respect to these indemnification guarantees. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Sep. 30, 2023 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | 13. Quarterly Financial Data (Unaudited) The following table summarizes the Company’s unaudited quarterly financial information for each of the four quarters of 2023 and 2022 (the sum of quarterly periods may not equal full-year amounts due to rounding): Three Months Ended September 30, July 1, April 1, December 31, (In thousands, except per share amounts) Revenue $ 305,147 $ 373,356 $ 304,173 $ 672,579 Gross profit 128,054 171,762 131,618 285,057 Net income (loss) ( 31,239 ) ( 23,571 ) ( 30,652 ) 75,188 Net income (loss) per share - basic $ ( 0.25 ) $ ( 0.18 ) $ ( 0.24 ) $ 0.59 Net income (loss) per share - diluted $ ( 0.25 ) $ ( 0.18 ) $ ( 0.24 ) $ 0.57 Three Months Ended October 1, July 2, April 2, January 1, (In thousands, except per share amounts) Revenue $ 316,290 $ 371,783 $ 399,781 $ 664,481 Gross profit 124,099 175,848 179,034 317,385 Net income (loss) ( 64,067 ) ( 597 ) 8,566 123,481 Net income (loss) per share - basic $ ( 0.50 ) $ 0.00 $ 0.07 $ 0.97 Net income (loss) per share - diluted $ ( 0.50 ) $ 0.00 $ 0.06 $ 0.87 |
Restructuring Plan
Restructuring Plan | 12 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Plan | 14. Restructuring Plan On June 14, 2023, the Company initiated a restructuring plan to reduce its cost base (the “2023 restructuring plan”). The 2023 restructuring plan included a reduction in force involving approximately 7 % of the Company's employees, further reducing the Company’s real estate footprint, and re-evaluation of certain program spend. Total pre-tax restructuring and abandonment costs under the 2023 restructuring plan were $ 11.4 million, substantially all of which were incurred in the third quarter of fiscal 2023, with nominal amounts to be incurred through the first quarter of fiscal 2024. Additionally, in March 2023, in support of operational efficiencies, the Company abandoned portions of its office spaces for the remainder of their respective lease terms resulting in non-recurring abandonment charges of $ 4.8 million. Restructuring and abandonment costs by major cost-type incurred were as follows: Twelve Months Ended (in thousands) September 30, Employee-related costs $ 9,083 Lease abandonment charges 1 5,600 Other restructuring costs 966 Total restructuring and abandonment costs $ 15,649 1 Restructuring and abandonment costs for fiscal 2023, include $ 4.8 million of non-recurring lease abandonment charges that were incurred in March 2023, when the Company abandoned portions of its office spaces for the remainder of their respective lease terms in support of operational efficiencies. Restructuring and abandonment costs are recorded in the Company's consolidated statements of operations and comprehensive income (loss) as follows: Twelve Months Ended (in thousands) September 30, Research and development 1 $ 6,556 Sales and marketing 1 5,635 General and administrative 1 3,458 Total restructuring and abandonment costs $ 15,649 1 Restructuring and abandonment costs for twelve months ended September 30, 2023, include accelerated depreciation for leasehold improvements and non-recurring write-offs for operating lease right-of-use assets that were incurred in March 2023, when the Company abandoned portions of its office spaces for the remainders of their respective lease terms in support of operational efficiencies. The following table summarizes the Company's restructuring activities recorded in accrued expenses and accrued compensation within the consolidated balance sheets: (in thousands) Employee Related Costs Lease Abandonment and Other Restructuring Costs Total Balance as of October 1, 2022 $ - $ - $ - Restructuring charges 9,083 1,022 10,105 Cash paid ( 7,015 ) ( 966 ) ( 7,981 ) Balance as of September 30, 2023 $ 2,068 $ 56 $ 2,124 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | 15. Subsequent Event On November 15, 2023, the Company announced that its Board of Directors authorized a common stock repurchase program of up to $ 200.0 million. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Preparation | Basis of Presentation and Preparation The consolidated financial statements, which include the accounts of Sonos, Inc. and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP"). All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation. The Company operates on a 52-week or 53-week fiscal year ending on the Saturday nearest September 30 each year. The Company’s fiscal year is divided into four quarters of 13 weeks, each beginning on a Sunday and containing two 4-week periods followed by a 5-week period. An additional week is included in the fourth fiscal quarter approximately every five years to realign fiscal quarters with calendar quarters. This last occurred in the Company’s fiscal year ended October 3, 2020, and will reoccur in the fiscal year ending October 3, 2026. As used in the Annual Report on Form 10-K, “fiscal 2023” refers to the 52-week fiscal year ending September 30, 2023, “fiscal 2022” refers to the 52-week fiscal year ending October 1, 2022, and “fiscal 2021” refers to the 52-week fiscal year ending October 2, 2021. |
Use of Estimates and Judgments | Use of Estimates and Judgments The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. For revenue recognition, examples of estimates and judgments include: determining the nature and timing of satisfaction of performance obligations, determining the standalone selling price ("SSP") of performance obligations and estimating variable consideration such as sales incentives and product returns. Additionally, estimates and judgments are made by management for allowances for credit losses, excess and obsolete inventory, loss on purchase commitments, useful lives associated with property and equipment, incremental borrowing rates associated with leases, the recording of and release of valuation allowances with respect to deferred tax assets and uncertain tax positions, impairment of long-lived assets, impairment of goodwill and indefinite-lived intangible assets, warranty, contingencies and valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, the Company evaluates its estimates and judgments compared to historical experience and trends that form the basis for making estimates and judgments about the carrying value of assets and liabilities. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of two components: net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to net gains and losses that are recorded as an element of stockholders’ equity but are excluded from net income (loss). The Company’s other comprehensive income (loss) consists of net unrealized gains and losses on foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of short-term, highly liquid financial instruments with insignificant interest rate risk that are readily convertible to cash and have maturities of three months or less from the date of purchase. As of September 30, 2023, and October 1, 2022 , cash equivalents consisted of money market funds, which are recorded at fair value. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the invoiced amount less allowances for credit losses and sales incentives, do not require collateral and do not bear interest. The allowance for credit losses is established through a provision for net bad debt expense which is recorded in general and administrative expense in the consolidated statements of operations and comprehensive income (loss). The Company determines the adequacy of the allowance for credit losses by evaluating the collectability of accounts, including consideration of the age of invoices, each customer’s expected ability to pay and collection history, customer-specific information, and current economic conditions that may impact the customer's ability to pay. This estimate is periodically adjusted as a result of the aforementioned process, or when the Company becomes aware of a specific customer’s inability to meet its financial obligations. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company maintains cash and cash equivalents in several high-quality financial institutions. Cash and cash equivalents held at these banks, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. These deposits may be redeemed upon demand, and management believes that the financial institutions that hold the Company’s cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with respect to cash. The Company has not experienced any losses in such accounts. |
Inventories | Inventories Inventories primarily consist of finished goods and component parts, which are purchased from contract manufacturers and component suppliers. Inventories are stated at lower of cost and net realizable value. Cost is determined using a standard costing method, which approximates first-in first-out. Inventory costs primarily consist of materials, inbound freight, import duties, tariffs, direct labor and manufacturing overhead, logistics, and other handling fees. The Company assesses the valuation of inventory balances including an assessment to determine potential excess and/or obsolete inventory. The Company may be required to write down the value of inventory if estimates of future demand and market conditions indicate excess and/or obsolete inventory. Inventory write-downs and losses on purchase commitments are recorded as a component of cost of revenue in the consolidated statement of operations and comprehensive income (loss). For the fiscal years ended September 30, 2023, and October 1, 2022, losses related to purchase commitments were $ 14.7 million and $ 12.0 million, respectively. Ownership of inventory transfers to the Company based on contractual terms with its contract manufacturers. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets as follows: Computer hardware and software 1 - 5 years Furniture and fixtures 2 - 5 years Tooling and production line test equipment 2 - 4 years Leasehold improvements 2 - 15 years Product displays 1 - 4 years Costs incurred to improve leased office space are capitalized. Leasehold improvements are amortized on a straight-line basis over the shorter of the term of the lease or the estimated useful life of the improvement. Expenditures for major renewals and improvements that extend the useful lives of property and equipment are capitalized. Maintenance, repair costs and gains or losses associated with disposals are charged to expense as incurred. Product displays are deployed at retail locations. Because the product displays facilitate marketing of the Company’s products within the retail stores, depreciation for product displays is recorded in sales and marketing expenses in the consolidated statements of operations and comprehensive income (loss) . |
Cloud Computing Arrangements | Cloud Computing Arrangements The Company incurs costs to implement cloud computing arrangements that are hosted by a third-party vendor. Implementation costs incurred during the application development stage are capitalized until the software is ready for its intended use. The costs are then amortized on a straight-line basis over the term of the associated hosting arrangement and are recognized as an operating expense within the consolidated statements of operations and comprehensive income (loss). Beginning in fiscal 2020, the Company conducted activities to replace its legacy enterprise resource planning ("ERP") system in order to accommodate the Company's expanding operations and went live with the new ERP in May 2022. Capitalized costs related to cloud computing arrangements, net of accumulated amortization, were $ 18.0 million and $ 21.7 million as of September 30, 2023 and October 1, 2022, respectively, and are reported as a component of other noncurrent assets on the Company's consolidated balance sheets. Amortization expenses for implementation costs for cloud-based computing arrangements for the twelve months ended September 30, 2023, and October 1, 2022, were $ 3.7 million and $ 1.9 million, respectively. Accumulated amortization for cloud-based computing arrangements was $ 6.2 million and $ 2.5 million as of September 30, 2023, and October 1, 2022 , respectively. |
Impairment of Goodwill and Indefinite-lived Intangible Assets | Impairment of Goodwill and Indefinite-lived Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized and are tested for impairment on an annual basis during the third quarter of each fiscal year or between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit or asset below its carrying value. In connection with the Company's evaluation of goodwill impairment, the Company performs a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not conclusive, the Company tests goodwill for impairment, including comparing the fair value of the reporting unit to its carrying value (including attributable goodwill). The Company determines fair value of its reporting unit using an income or market approach incorporating market participant considerations and management’s assumptions on revenue growth rates, operating margins, discount rates and expected capital expenditures. Fair value determinations may include both internal and third-party valuations. In connection with the Company’s evaluation of indefinite-lived intangible asset impairment, the Company performs a qualitative assessment to determine if it is more likely than not that the fair value of the asset is less than its carrying amount. If the qualitative assessment is not conclusive, the Company proceeds to test for impairment by comparing the fair value of the asset to the carrying value. Fair value is determined based on estimated discounted future cash flow analyses that include significant management assumptions such as revenue growth rates, weighted-average costs of capital and assumed royalty rates. If the carrying value exceeds fair value, an impairment charge will be recorded to reduce the asset to fair value. For fiscal years 2023, 2022, and 2021, the Company’s qualitative assessments identified no factors indicating it was more likely than not that the fair value of the Company’s reporting unit and indefinite-lived intangible assets were less than their respective carrying amounts. Therefore, the Company incurred no impairment charges. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates the recoverability of its long-lived assets, which primarily comprises property and equipment and operating lease right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Company performs impairment testing at the level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Recoverability is measured by comparing the carrying amounts to the expected future undiscounted cash flows attributable to the assets. If it is determined that an asset may not be recoverable, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is determined based on estimated discounted future cash flows analyses. There were no impairment charges identified on the Company's long-lived assets during fiscal 2023, 2022, and 2021. |
Product Warranties | Product Warranties The Company’s products are covered by warranty to be free from defects in material and workmanship for a period of one year , except in the EU and select other countries where the Company provides a minimum two-year warranty, depending on the region, on all its products. A t the time of sale, an estimate of future warranty costs is recorded as a component of cost of revenue and a warranty liability is recorded for estimated costs to satisfy the warranty obligation. The Company’s estimate of costs to fulfill its warranty obligations is based on historical experience and expectations of future costs to repair or replace. |
Legal Contingencies | Legal Contingencies If a potential loss from any claim or legal proceeding is considered probable, and the amount can be reasonably estimated, the Company records a liability for an estimated loss. Legal fees are expensed as incurred and included in general and administrative expenses in the consolidated statements of operations and comprehensive income (loss). Se e Note 12. Commitments and Contingencies for additional information regarding legal contingencies. |
Treasury Stock | Treasury Stock The Company accounts for treasury stock acquisitions using the cost method. The Company accounts for the retirement of treasury stock by deducting its par value from common stock and reflecting any excess of cost over par value as a deduction from additional paid-in capital on the consolidated balance sheets. |
Fair Value Accounting | Fair Value Accounting Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level Input Input Definition Level 1 Quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2 Inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities, in active markets or other inputs that are observable or can be corroborated with market data at the measurement date. Level 3 Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. |
Foreign Currency | Foreign Currency Certain of the Company’s wholly owned subsidiaries have non-U.S. dollar functional currencies. The Company translates assets and liabilities of non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period and stockholders’ equity at historical rates. Revenue and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from translation are recognized in foreign currency translation included in accumulated other comprehensive loss. The Company remeasures monetary assets or liabilities denominated in currencies other than the functional currency using exchange rates prevailing on the balance sheet date, and non-monetary assets and liabilities at historical rates. Foreign currency remeasurement and transaction gains and losses are included in other income (expense), net. |
Revenue Recognition | Revenue Recognition Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company's contracts generally include a combination of products and services. Revenue is allocated to distinct performance obligations and is recognized net of allowances for returns, discounts, sales incentives and any taxes collected from customers, which are subsequently remitted to governmental authorities. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are not considered a separate performance obligation and are accounted for as a fulfillment cost and are included in cost of revenue. Nature of Products and Services Product revenue primarily includes sales of Sonos speakers and Sonos system products, which include software that enables the Company’s products to operate over a customer’s wireless network, as well as connect to various third-party services, including music and voice. The Company also generates a small portion of revenue from Partner products and other revenue sources in connection with partnerships, accessories, professional services, licensing, advertising, and subscription revenue. Revenue for module units is related to hardware and embedded software that is integrated into final products that are manufactured and sold by the Company's partners. Software primarily consists of firmware embedded in the products and the Sonos app, which is software that can be downloaded to consumer devices at no charge, with or without the purchase of one of the Company’s products. Products and related software are accounted for as a single performance obligation and all intended functionality is available to the customer upon purchase. The revenue allocated to the products and related software is the substantial portion of the total sale price. Product revenue is recognized at the point in time when control is transferred, which is either upon shipment or upon delivery to the customer, depending on delivery terms. Service revenue includes revenue allocated to (i) unspecified software upgrades and (ii) cloud-based services that enable products to access third-party music and voice assistant platforms, based on relative standalone selling price, which are each distinct performance obligations and are provided to customers at no additional charge. Unspecified software upgrades are provided on a when-and-if-available basis and have historically included updates and enhancements such as bug fixes, feature enhancements and updates to the ability to connect to third-party music or voice assistant platforms. Service revenue is recognized ratably over the estimated service period. Significant Judgments The Company’s contracts with customers generally contain promises to transfer products and services as described above. Determining whether products and services are considered distinct performance obligations that should be accounted for separately requires significant judgment. Determining the SSP for each distinct performance obligation requires judgment. The Company estimates SSP for items that are not sold separately, which include the products and related software, unspecified software upgrades and cloud-based services, using information that may include competitive pricing information, where available, as well as analyses of the cost of providing the products or services plus a reasonable margin. In developing SSP estimates, the Company also considers the nature of the products and services and the expected level of future services. Determining the revenue recognition period for unspecified software upgrades and cloud-based services also requires judgment. The Company recognizes revenue attributable to these performance obligations ratably over the best estimate of the period that the customer is expected to receive the services. In developing the estimated period of providing future services, the Company considers past history, plans to continue to provide services, including plans to continue to support updates and enhancements to prior versions of the Company’s products, expected technological developments, obsolescence, competition and other factors. The estimated service period may change in the future in response to competition, technology developments and the Company’s business strategy. The Company offers sales incentives through various programs consisting primarily of discounts, cooperative advertising and market development fund programs. The Company records cooperative advertising and market development fund programs with customers as a reduction to revenue unless it receives a distinct benefit in exchange for credits claimed by the customer and can reasonably estimate the fair value of the benefit received, in which case the Company records it as an expense. The Company recognizes a liability or a reduction to accounts receivable, and reduces revenue based on the estimated amount of sales incentives that will be claimed by customers. Estimates for sales incentives are developed using the most likely amount and are included in the transaction price to the extent that a significant reversal of revenue would not result once the uncertainty is resolved. In developing its estimate, the Company also considers the susceptibility of the incentive to outside influences, the length of time until the uncertainty is resolved and the Company’s experience with similar contracts. Reductions in revenue related to discounts are allocated to products and services on a relative basis based on their respective SSP. Judgment is required to determine the timing and amount of recognition of marketing funds which the Company estimates based on past practice of providing similar funds. The Company accepts returns from direct customers and from certain resellers. To establish an estimate for returns, the Company uses the expected value method by considering a portfolio of contracts with similar characteristics to calculate the historical returns rate. When determining the expected value of returns, the Company considers future business initiatives and relevant anticipated future events. Supplier Concentration The Company relies on third parties for the supply and manufacture of its products, as well as third-party logistics providers for the distribution of its products. In instances where these parties fail to perform their obligations, the Company may be unable to find alternative suppliers or satisfactorily deliver its products to customers on time, if at all. During fiscal 2023, 2022 and 2021, approximately 58 % , 57 % and 59 % , respectively, of the Company’s finished goods purchased during each year were from one vendor. Deferred Revenue and Payment Terms The Company invoices each order upon hardware shipment or delivery and recognizes revenue for each distinct performance obligation when transfer of control has occurred, which in the case of services, may extend over several reporting periods. Amounts invoiced in advance of revenue recognition are recorded as deferred revenue on the consolidated balance sheets. Deferred revenue primarily relates to revenue allocated to unspecified software upgrades and platform services, as well as for newly launched products sold to resellers not recognized until the date of general availability is reached. General availability deferrals are classified as current deferred revenue as the Company starts shipping the product to the reseller within one month prior to the general availability date. The Company classifies deferred revenue as noncurrent if amounts are expected to be recognized as revenue beyond one year from the balance sheet date. Payment Terms Payment terms and conditions vary among the Company’s distribution channels although terms generally include a requirement of payment within 30 days of product shipment. Sales directly to customers from the Company’s website are paid at the time of product shipment. Prior to providing payment terms to customers, an evaluation of the customer’s credit risk is performed. Contractual allowances are an offset to accounts receivable. |
Research and Development | Research and Development Research and development expenses consist primarily of personnel-related expenses, consulting and outside professional service costs, tooling and prototype materials and overhead costs. Substantially all of the Company’s research and development expenses are related to developing new products and services and improving existing products and services. To date, software development costs have been expensed as incurred because the period between achieving technological feasibility and the release of the software has been short and development costs qualifying for capitalization have been insignificant. In-process research and development ("IPRD") assets represent the fair value of incomplete research and development projects obtained as part of a business combination that have not yet reached technological feasibility and are initially not subject to amortization; rather, these assets are subject to impairment considerations of indefinite-lived intangible assets. Upon completion of development, IPRD assets are considered definite-lived intangible assets, transferred to developed technology and are amortized over their useful lives. If a project were to be abandoned, the IPRD would be considered fully impaired and expensed to research and development. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and included in sales and marketing expenses. Advertising expenses were $ 43.9 million, $ 66.6 million and $ 62.3 million for fiscal 2023, 2022 and 2021 , respectively. |
Restructuring and Related Costs | Restructuring and Related Costs Costs associated with a restructuring plan generally consist of involuntary employee termination benefits, contract termination costs, and other exit-related costs including costs to close facilities. The Company records a liability for involuntary employee termination benefits when management has committed to a plan that establishes the terms of the arrangement and that plan has been communicated to employees. Costs to terminate a contract before the end of the term are recognized on the termination date, and costs that will continue to be incurred in a contract for the remaining term without economic benefit are recognized as of the cease-use date. Restructuring and related costs may also include the write-down of related assets, including operating lease right-of-use assets, when the sale or abandonment of the asset is a direct result of the plan. Other exit-related costs are recognized as incurred. Restructuring and related costs are recognized as an operating expense within the consolidated statements of operations and comprehensive income (loss) and are classified based on the Company's classification policy for each category of operating expense. |
Stock-Based Compensation | Stock-Based Compensation The Company measures stock-based compensation cost at fair value on the date of grant. Compensation cost for stock options is recognized, on a straight-line basis, as an expense over the period of vesting as the employee performs the related services, net of estimated forfeitures. The Company estimates the fair value of stock option awards using the Black-Scholes option-pricing model and is based on the Company’s closing stock price on the trading day immediately prior to the date of grant. The Company estimates forfeitures based on expected future terminations and will revise rates, as necessary, in subsequent periods if actual forfeitures differ from initial estimates. The fair value of RSUs is based on the Company's closing stock price on the trading day immediately preceding the date of gran t. The Company estimates the fair value of performance stock units ("PSU") on the grant date and recognizes compensation expense in the period it becomes probable that performance conditions will be achieved. On a quarterly basis, the Company re-evaluates the assumption of the probability that performance conditions will be satisfied and revises its estimates as appropriate as new or updated information becomes available. |
Retirement Plans | Retirement Plans The Company has a defined contribution 401(k) plan (the "401(k) Plan") for the Company’s U.S.-based employees, as well as various defined contribution plans for its international employees. Eligible U.S. employees may make tax-deferred contributions under the 401(k) plan, but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code of 1986, as amended (the "Code"). The Company matches contributions towards the 401(k) Plan and international defined contribution plans. The Company's matching contributions totaled $ 9.5 million, $ 8.2 million, and $ 7.6 million for fiscal 2023, 2022, and 2021 , respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income during the period that includes the enactment date. The Company records a valuation allowance when necessary to reduce its deferred tax assets to amounts that are more likely than not to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would result in a benefit to income taxes. The Company records uncertain tax positions in accordance with a two-step process whereby (i) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes in the consolidated statements of operations and comprehensive income (loss). The Company has not incurred any interest or penalties related to unrecognized tax benefits in any of the periods presented. The Company’s provision for (benefit from) income taxes, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits involves the use of estimates, assumptions and judgments. Although the Company believes its estimates, assumptions and judgments to be reasonable, any changes in tax law or its interpretation of tax laws and the resolutions of potential tax audits could significantly impact the amounts provided for income taxes in the Company’s consolidated financial statements. Actual future operating results and the underlying amount and type of income could differ materially from the Company’s estimates, assumptions and judgments thereby impacting the Company’s financial position and results of operations. |
Segment Information | Segment Information The Company operates as one operating segment as it only reports aggregate financial information on a consolidated basis, accompanied by disaggregated information about revenue by geographic region and product category to its Chief Executive Officer, who is the Company’s chief operating decision maker. |
Leases | Leases The substantial majority of the Company’s leases are for its office spaces and facilities, which are accounted for as operating leases. The Company determines whether an arrangement is a lease at inception if there is an identified asset, and if it has the right to control the identified asset for a period of time. Some of the Company’s leases include options to extend the leases for up to 5 years, and some include options to terminate the leases within 1 year. The Company's lease terms are only for periods in which it has enforceable rights and are impacted by options to extend or terminate the lease only when it is reasonably certain that the Company will exercise the option. For leases with terms greater than 12 months, the Company records the related right-of-use asset and lease obligation at the present value of lease payments over the lease terms. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease expense is recognized on a straight-line basis over the lease term. Lease agreements will typically exist with lease and non-lease components, which are accounted for separately. The Company's agreements may contain variable lease payments. The Company includes variable lease payments that depend on an index or a rate and exclude those which depend on facts or circumstances occurring after the commencement date, other than the passage of time. As most of the Company’s leases do not contain an implicit interest rate, the Company uses judgment to determine an incremental borrowing rate to use at lease commencement. |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Pending Adoption | Recently Adopted Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting, and then issued subsequent amendments to the initial guidance under ASU No. 2021-01 and ASU No. 2022-06 (collectively Topic 848). Topic 848 provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, derivatives, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments in this update apply only to contracts, hedging relationships, derivatives, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued as a result of reference rate reform. Topic 848 is currently effective and upon adoption may be applied prospectively to contract modifications and hedging relationships made on or before December 31, 2024. In June 2023, the Company amended its Revolving Credit Agreement (as defined below) to change the reference rate from LIBOR to the Secured Overnight Financing Rate (“SOFR”), effective July 1, 2023. The Company applied the practical expedients provided in Topic 848 to account for the modification as a continuation of the existing contract. The modification had no significant impact on the Company’s consolidated financial statements. Refer to Note 7. Debt for further information. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This update requires that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The Company adopted this standard in the fourth quarter of fiscal 2023. The adoption did not have a material impact on the Company's consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Credit Risk | As of September 30, 2023, and October 1, 2022, the Company’s customer that accounted for 10% or more of total accounts receivable, net, were as follows: September 30, October 1, Customer A 32 % 34 % The Company’s customer that accounted for 10% or more of total revenue were as follows: Year Ended September 30, October 1, October 2, Customer A 17 % 15 % 14 % |
Schedule of Property and Equipment | Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets as follows: Computer hardware and software 1 - 5 years Furniture and fixtures 2 - 5 years Tooling and production line test equipment 2 - 4 years Leasehold improvements 2 - 15 years Product displays 1 - 4 years Property and equipment, net by country as of September 30, 2023, and October 1, 2022 were as follows: September 30, October 1, (In thousands) China $ 32,045 $ 40,609 United States 30,430 30,870 Other countries 24,600 14,689 Property and equipment, net $ 87,075 $ 86,168 Property and equipment, net consist of the following: September 30, October 1, (In thousands) Computer hardware and software $ 41,679 $ 42,000 Furniture and fixtures 6,971 7,511 Tooling and production line test equipment 108,693 100,337 Leasehold improvements 53,648 49,656 Product displays 68,771 56,885 Total property and equipment 279,762 256,389 Accumulated depreciation and amortization ( 192,687 ) ( 170,221 ) Property and equipment, net $ 87,075 $ 86,168 |
Schedule of Intercompany Foreign Currency Balances | Foreign currency remeasurement and transaction gains (losses) are recorded in other income (expense), net as follows: September 30, October 1, October 2, (In thousands) Foreign currency remeasurement and transaction gains (losses) $ 13,674 $ ( 21,877 ) $ 2,353 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Value, Assets Measured on Recurring Basis | The following table summarizes fair value measurements by level for the assets measured at fair value on a recurring basis as of September 30, 2023, and October 1, 2022: September 30, 2023 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money market funds (cash equivalents) $ 51,522 $ — $ — $ 51,522 October 1, 2022 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money market funds (cash equivalents) $ 187,170 $ — $ — $ 187,170 |
Revenue and Geographic Inform_2
Revenue and Geographic Information (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue by geographical region also includes the applicable service revenue for software upgrades and cloud-based services attributable to each region and is based on ship-to address, is as follows: September 30, October 1, October 2, (In thousands) Americas $ 1,048,245 $ 1,044,113 $ 980,931 Europe, Middle East and Africa ("EMEA") 518,179 578,034 618,476 Asia Pacific ("APAC") 88,831 130,189 117,337 Total revenue $ 1,655,255 $ 1,752,336 $ 1,716,744 Revenue is attributed to individual countries based on ship-to address and also includes the applicable service revenue for software upgrades and cloud-based services attributable to each country. Revenue by significant countries is as follows: September 30, October 1, October 2, (In thousands) United States $ 971,151 $ 964,118 $ 890,837 Other countries 684,104 788,218 825,907 Total revenue $ 1,655,255 $ 1,752,336 $ 1,716,744 Revenue by product category also includes the applicable service revenue for software upgrades and cloud-based services attributable to each product category. Revenue by major product category is as follows: September 30, October 1, October 2, (In thousands) Sonos speakers $ 1,293,440 $ 1,368,916 $ 1,378,808 Sonos system products 285,064 297,110 265,180 Partner products and other revenue 76,751 86,310 72,756 Total revenue $ 1,655,255 $ 1,752,336 $ 1,716,744 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Changes in Allowance for Credit Losses | The following table summarizes changes in the allowance for credit losses for fiscal 2023, 2022 and 2021: September 30, October 1, October 2, (In thousands) Beginning balance $ 2,744 $ 1,547 $ 1,307 Increases 1,561 2,098 1,529 Write-offs ( 1,594 ) ( 901 ) ( 1,289 ) Ending balance $ 2,711 $ 2,744 $ 1,547 |
Summary of Changes In Allowance for Sales Incentives | The following table summarizes the changes in the allowance for sales incentives for fiscal 2023, 2022 and 2021: September 30, October 1, October 2, (In thousands) Beginning balance $ 23,573 $ 19,160 $ 17,515 Charged to revenue 139,657 51,225 95,249 Utilization of sales incentive allowance ( 134,155 ) ( 46,812 ) ( 93,604 ) Ending balance $ 29,075 $ 23,573 $ 19,160 |
Schedule of Inventories, Net | Inventories, net, consist of the following: September 30, October 1, (In thousands) Finished goods $ 281,571 $ 406,657 Components 64,950 47,631 Inventories $ 346,521 $ 454,288 |
Schedule of Property and Equipment | Property and equipment are stated at historical cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets as follows: Computer hardware and software 1 - 5 years Furniture and fixtures 2 - 5 years Tooling and production line test equipment 2 - 4 years Leasehold improvements 2 - 15 years Product displays 1 - 4 years Property and equipment, net by country as of September 30, 2023, and October 1, 2022 were as follows: September 30, October 1, (In thousands) China $ 32,045 $ 40,609 United States 30,430 30,870 Other countries 24,600 14,689 Property and equipment, net $ 87,075 $ 86,168 Property and equipment, net consist of the following: September 30, October 1, (In thousands) Computer hardware and software $ 41,679 $ 42,000 Furniture and fixtures 6,971 7,511 Tooling and production line test equipment 108,693 100,337 Leasehold improvements 53,648 49,656 Product displays 68,771 56,885 Total property and equipment 279,762 256,389 Accumulated depreciation and amortization ( 192,687 ) ( 170,221 ) Property and equipment, net $ 87,075 $ 86,168 |
Schedule of goodwill | The following table presents the changes in carrying amount of goodwill for the fiscal year ended September 30, 2023: (In thousands) Balance as of October 1, 2022 $ 77,300 Effect of exchange rate changes on goodwill 3,120 Balance as of September 30, 2023 $ 80,420 |
Schedule of finite-lived intangible assets, future amortization expense | Th e following table reflects the changes in the net carrying amount of the components of intangible assets associated with the Company's acquisition activity: September 30, 2023 Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net Carrying Value Weighted-Average Remaining Life (In thousands, except weighted-average remaining life) Tradename $ 451 $ ( 113 ) $ ( 12 ) $ 326 4.50 Technology-based 31,480 ( 11,588 ) - 19,892 4.89 Total finite-lived intangible assets 31,931 ( 11,701 ) ( 12 ) 20,218 4.88 In-process research and development and other intangible 71,759 - ( 1,968 ) 69,791 Total intangible assets $ 103,690 $ ( 11,701 ) $ ( 1,980 ) $ 90,009 The following table summarizes the estimated future amortization expense of the Company's intangible assets as September 30, 2023: Fiscal years ending Future Amortization Expense (In thousands) 2024 $ 5,969 2025 3,367 2026 3,038 2027 3,022 2028 and thereafter 4,822 Total future amortization expense $ 20,218 |
Schedule of Accrued Expenses | Accrued expenses consisted of the following: September 30, October 1, (In thousands) Accrued inventory and supply chain costs $ 48,384 $ 51,011 Accrued advertising and marketing 13,029 21,292 Accrued taxes 11,410 7,081 Accrued general and administrative expenses 9,924 21,634 Accrued product development 4,298 8,168 Other accrued payables 2,672 104 Total accrued expenses $ 89,717 $ 109,290 |
Changes in deferred balances and expected revenue recognition | The following table presents the changes in the Company's deferred revenue balances for the fiscal years ended September 30, 2023, October 1, 2022, and October 2, 2021: September 30, October 1, October 2, (In thousands) Deferred revenue, beginning of period $ 83,470 $ 89,498 $ 62,389 Recognition of revenue included in beginning of period deferred revenue ( 27,057 ) ( 41,438 ) ( 19,175 ) Revenue deferred, net of revenue recognized on contracts in the respective period 24,425 35,410 46,284 Deferred revenue, end of period $ 80,838 $ 83,470 $ 89,498 |
Remaining performance obligation | The Company expects the following recognition of deferred revenue as of September 30, 2023: For the fiscal years ending 2024 2025 2026 2027 2028 and Beyond Total (In thousands) Revenue expected to be recognized $ 20,188 $ 17,086 $ 14,718 $ 12,088 $ 16,758 $ 80,838 |
Schedule of Other Current Liabilities | Other current liabilities consist of the following: September 30, October 1, (In thousands) Reserve for returns $ 21,462 $ 18,263 Short-term operating lease liabilities 1,153 10,532 Warranty liability 7,466 5,771 Other 4,172 5,083 Total other current liabilities $ 34,253 $ 39,649 |
Schedule of product warranty liability | The following table presents the changes in the Company’s warranty liability for the fiscal years ended September 30, 2023, and October 1, 2022: September 30, October 1, (In thousands) Warranty liability, beginning of period $ 5,771 $ 5,604 Provision for warranties issued during the period 12,517 13,033 Settlements of warranty claims during the period ( 10,822 ) ( 12,866 ) Warranty liability, end of period $ 7,466 $ 5,771 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Components of Lease Expense | The components of lease expense for the fiscal year ended September 30, 2023, was as follows: Year Ended September 30, 2023 (In thousands) Operating lease cost $ 12,324 Short-term lease cost 340 Variable lease cost 5,480 Total lease cost $ 18,144 |
Maturity of Lease Liabilities | The following table summarizes the maturity of lease liabilities under operating leases as of September 30, 2023: Fiscal years ending Operating leases (In thousands) 2024 $ 4,415 2025 9,579 2026 7,888 2027 6,395 2028 5,841 Thereafter 41,040 Total lease payments 75,158 Less imputed interest ( 19,049 ) Total lease liabilities $ 56,109 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock option activity | The summary of the Company’s stock option activity is as follows: Number of Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (In years) (In thousands) Outstanding at October 1, 2022 10,802,882 $ 13.37 4.5 $ 10,956 Exercised ( 2,005,776 ) $ 10.64 Forfeited ( 247,149 ) $ 14.20 Outstanding at September 30, 2023 8,549,957 $ 13.99 3.6 $ 1,689 At September 30, 2023 Options exercisable 8,549,957 $ 13.99 3.6 $ 1,689 Options vested and expected to vest 8,549,957 $ 13.99 3.6 $ 1,689 |
Schedule of restricted stock unit activity | The summary of the Company’s RSU activity is as follows: Number of Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value (In thousands) Outstanding at October 1, 2022 8,308,177 $ 19.25 $ 115,484 Granted 5,272,828 $ 17.33 Released ( 4,458,367 ) $ 16.66 Forfeited ( 1,460,603 ) $ 19.34 Outstanding at September 30, 2023 7,662,035 $ 19.42 $ 98,917 At September 30, 2023 Units expected to vest 6,618,791 $ 19.39 $ 85,449 |
Schedule of performance stock units activity | The summary of the Company’s PSU activity is as follows: Number of Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value (In thousands) Outstanding at October 1, 2022 398,077 $ 26.96 $ 5,533 Granted 249,370 $ 17.54 Released ( 263,158 ) $ 26.26 Forfeited ( 119,098 ) $ 21.45 Outstanding at September 30, 2023 265,191 $ 21.27 $ 3,424 |
Schedule of stock-based compensation expense | Total stock-based compensation expense by function category was as follows: September 30, October 1, October 2, (In thousands) Cost of revenue $ 2,038 $ 1,620 $ 988 Research and development 35,530 30,724 25,075 Sales and marketing 15,677 15,335 13,570 General and administrative 23,612 27,961 22,494 Total stock-based compensation expense $ 76,857 $ 75,640 $ 62,127 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Before Provision For (Benefit From) Income Taxes | The Company’s income before provision for (benefit from) income taxes for fiscal 2023, 2022 and 2021 were as follows: September 30, October 1, October 2, (In thousands) Domestic $ ( 9,904 ) $ 54,609 $ 126,810 Foreign 14,298 14,121 30,115 Income before provision for (benefit from) income taxes $ 4,394 $ 68,730 $ 156,925 |
Schedule of Provision For (Benefit From) Income Taxes | Components of the provision for (benefit from) income taxes consisted of the following: September 30, October 1, October 2, (In thousands) Current: U.S. Federal $ 7,507 $ — $ — U.S. State 4,947 483 440 Foreign 2,810 3,401 6,216 Total current 15,264 3,884 6,656 Deferred: U.S. Federal — ( 1,459 ) — U.S. State — ( 21 ) — Foreign ( 596 ) ( 1,057 ) ( 8,326 ) Total deferred ( 596 ) ( 2,537 ) ( 8,326 ) Provision for (benefit from) income taxes $ 14,668 $ 1,347 $ ( 1,670 ) |
Schedule of Deferred Tax Assets and Liabilities | Components of the Company’s deferred income tax assets and liabilities are as follows: September 30, October 1, (In thousands) Deferred tax assets Research & development tax credit carryforwards $ 75,593 $ 92,487 Capitalized research & development 63,395 9,420 Accrued expenses and reserves 17,837 8,872 Deferred revenue 15,855 14,170 Operating lease liability 13,097 7,717 Stock-based compensation 7,727 9,261 Foreign net operating loss carryforwards 7,606 7,702 Other capitalized costs 5,364 3,799 Depreciation 2,700 2,239 U.S. net operating loss carryforwards 1,852 26,363 Other 494 182 Total deferred tax assets 211,520 182,212 Valuation allowance ( 185,840 ) ( 162,267 ) Deferred tax assets, net of valuation allowance 25,680 19,945 Deferred tax liabilities Intangibles ( 22,475 ) ( 22,125 ) Right-of-use asset ( 11,392 ) ( 5,940 ) Other — ( 14 ) Total deferred tax liabilities ( 33,867 ) ( 28,079 ) Net deferred tax assets (liabilities) $ ( 8,187 ) $ ( 8,134 ) Reported as Deferred tax assets $ 1,659 $ 1,508 Deferred tax liabilities ( 9,846 ) ( 9,642 ) Net deferred tax assets (liabilities) $ ( 8,187 ) $ ( 8,134 ) |
Summary of Changes in Valuation Allowance | The following table summarizes changes in the valuation allowance for fiscal 2023, 2022 and 2021: September 30, October 1, October 2, (In thousands) Beginning balance $ 162,267 $ 155,978 $ 113,939 Increase during the period 23,628 13,841 49,791 Decrease during the period ( 55 ) ( 7,552 ) ( 7,752 ) Ending balance $ 185,840 $ 162,267 $ 155,978 |
Schedule of Effective Income Tax Rate Reconciliation | Reconciliation of U.S. statutory federal income taxes to the Company’s provision for (benefit from) income taxes is as follows: September 30, October 1, October 2, (In thousands) U.S. federal income taxes at statutory rate $ 923 $ 14,433 $ 32,954 U.S. state and local income taxes, net of federal benefit and state credits ( 841 ) ( 2,594 ) ( 9,473 ) Foreign income tax rate differential 734 970 1,430 Stock-based compensation 104 ( 15,532 ) ( 47,496 ) Federal research and development tax credits ( 7,591 ) ( 8,983 ) ( 21,535 ) Unrecognized federal tax benefits 184 ( 2,482 ) 4,041 Change in tax rate — 5,013 ( 2,681 ) Global intangible low taxed income, net of foreign tax credits 1,234 290 — Foreign -derived intangible income (FDII) deduction ( 6,863 ) — — Subpart F income 1,374 — — 162(m) executive compensation limitation 2,513 2,574 — Other ( 695 ) 1,079 ( 565 ) Change in valuation allowance 23,592 6,579 41,655 Provision for income taxes $ 14,668 $ 1,347 $ ( 1,670 ) |
Schedule of Changes in Unrecognized Tax Benefits | Change in gross unrecognized tax benefits, excluding interest and penalties, as a result of uncertain tax positions are as follows: September 30, October 1, October 2, (In thousands) Beginning balance $ 17,021 $ 21,252 $ 14,721 Decrease - tax positions in prior periods ( 566 ) ( 6,039 ) ( 4 ) Increase - tax positions in current periods 1,164 1,808 6,535 Ending balance $ 17,619 $ 17,021 $ 21,252 |
Net Income (Loss) Per Share A_2
Net Income (Loss) Per Share Attributable to Common Stockholders (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share | The following table sets forth the computation of the Company’s basic and di luted net income (loss) per share attributable to common stockholders: September 30, October 1, October 2, (In thousands, except share and per share data) Numerator: Net income (loss) attributable to common stockholders - basic and diluted $ ( 10,274 ) $ 67,383 $ 158,595 Denominator: Weighted-average shares of common stock - basic 127,702,885 127,691,030 122,245,212 Effect of potentially dilutive stock options — 5,472,807 10,120,238 Effect of RSUs — 4,385,406 7,875,245 Effect of PSUs — 212,835 68,457 Weighted-average shares of common stock—diluted 127,702,885 137,762,078 140,309,152 Net income (loss) per share attributable to common stockholders: Basic $ ( 0.08 ) $ 0.53 $ 1.30 Diluted $ ( 0.08 ) $ 0.49 $ 1.13 |
Schedule of antidilutive securities | The foll owing potentially dilutive shares as of the end of each period presented were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been antidilutive: September 30, October 1, October 2, Stock options to purchase common stock 9,449,904 6,877,530 9,030,004 Restricted stock units 9,742,444 5,041,645 3,505,140 Performance stock units 149,991 88,672 55,586 Total 19,342,339 12,007,847 12,590,730 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Unaudited Quarterly Financial Information | The following table summarizes the Company’s unaudited quarterly financial information for each of the four quarters of 2023 and 2022 (the sum of quarterly periods may not equal full-year amounts due to rounding): Three Months Ended September 30, July 1, April 1, December 31, (In thousands, except per share amounts) Revenue $ 305,147 $ 373,356 $ 304,173 $ 672,579 Gross profit 128,054 171,762 131,618 285,057 Net income (loss) ( 31,239 ) ( 23,571 ) ( 30,652 ) 75,188 Net income (loss) per share - basic $ ( 0.25 ) $ ( 0.18 ) $ ( 0.24 ) $ 0.59 Net income (loss) per share - diluted $ ( 0.25 ) $ ( 0.18 ) $ ( 0.24 ) $ 0.57 Three Months Ended October 1, July 2, April 2, January 1, (In thousands, except per share amounts) Revenue $ 316,290 $ 371,783 $ 399,781 $ 664,481 Gross profit 124,099 175,848 179,034 317,385 Net income (loss) ( 64,067 ) ( 597 ) 8,566 123,481 Net income (loss) per share - basic $ ( 0.50 ) $ 0.00 $ 0.07 $ 0.97 Net income (loss) per share - diluted $ ( 0.50 ) $ 0.00 $ 0.06 $ 0.87 |
Restructuring Plan (Tables)
Restructuring Plan (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | |
Summary Of Restructuring and abandonment costs by major cost-type incurred | Restructuring and abandonment costs by major cost-type incurred were as follows: Twelve Months Ended (in thousands) September 30, Employee-related costs $ 9,083 Lease abandonment charges 1 5,600 Other restructuring costs 966 Total restructuring and abandonment costs $ 15,649 1 Restructuring and abandonment costs for fiscal 2023, include $ 4.8 million of non-recurring lease abandonment charges that were incurred in March 2023, when the Company abandoned portions of its office spaces for the remainder of their respective lease terms in support of operational efficiencies. |
Summary of restructuring activities recorded in accrued expenses and accrued compensation | The following table summarizes the Company's restructuring activities recorded in accrued expenses and accrued compensation within the consolidated balance sheets: (in thousands) Employee Related Costs Lease Abandonment and Other Restructuring Costs Total Balance as of October 1, 2022 $ - $ - $ - Restructuring charges 9,083 1,022 10,105 Cash paid ( 7,015 ) ( 966 ) ( 7,981 ) Balance as of September 30, 2023 $ 2,068 $ 56 $ 2,124 |
Restructuring And Abandonment Costs | |
Restructuring Cost and Reserve [Line Items] | |
Summary Of Restructuring and abandonment costs by major cost-type incurred | Restructuring and abandonment costs are recorded in the Company's consolidated statements of operations and comprehensive income (loss) as follows: Twelve Months Ended (in thousands) September 30, Research and development 1 $ 6,556 Sales and marketing 1 5,635 General and administrative 1 3,458 Total restructuring and abandonment costs $ 15,649 1 Restructuring and abandonment costs for twelve months ended September 30, 2023, include accelerated depreciation for leasehold improvements and non-recurring write-offs for operating lease right-of-use assets that were incurred in March 2023, when the Company abandoned portions of its office spaces for the remainders of their respective lease terms in support of operational efficiencies. |
Business Overview (Details)
Business Overview (Details) | Sep. 30, 2023 Country |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of countries where products are distributed | 60 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Textual (Details) | 12 Months Ended | ||
Sep. 30, 2023 USD ($) Segment | Oct. 01, 2022 USD ($) | Oct. 02, 2021 USD ($) | |
Product Warranty Liability [Line Items] | |||
Gain (loss) in related to purchase commitments | $ (14,700,000) | $ (12,000,000) | |
Capitalized costs | 18,000,000 | 21,700,000 | |
Amortization expenses | 3,700,000 | 1,900,000 | |
Accumulated amortization | 6,200,000 | 2,500,000 | |
Impairment charges | $ 0 | 0 | $ 0 |
Product warranty term | 1 year | ||
Employer contribution | $ 9,500,000 | 8,200,000 | 7,600,000 |
Number of operating segments | Segment | 1 | ||
Term of option to extend | 5 years | ||
Termination option period | 1 year | ||
European Union | Minimum | |||
Product Warranty Liability [Line Items] | |||
Product warranty term | 2 years | ||
Sales and marketing | |||
Product Warranty Liability [Line Items] | |||
Advertising costs | $ 43,900,000 | $ 66,600,000 | $ 62,300,000 |
One vendor | Supplier concentration risk | Inventories | |||
Product Warranty Liability [Line Items] | |||
Concentration percentage | 58% | 57% | 59% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedules of Concentration of Credit Risk (Details) - Customer A - Customer Concentration Risk | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Accounts receivable | |||
Product Information [Line Items] | |||
Concentration percentage | 32% | 34% | |
Revenue | |||
Product Information [Line Items] | |||
Concentration percentage | 17% | 15% | 14% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Property and Equipment (Details) | Sep. 30, 2023 |
Computer hardware and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 1 year |
Computer hardware and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 5 years |
Tooling and production line test equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Tooling and production line test equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 4 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 2 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 15 years |
Product displays | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 1 year |
Product displays | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, useful life | 4 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Intercompany Foreign Currency Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Product Information [Line Items] | |||
Foreign currency remeasurement and transaction gain (losses) | $ 7,335 | $ (10,775) | $ 1,108 |
Other income (expense) | |||
Product Information [Line Items] | |||
Foreign currency remeasurement and transaction gain (losses) | $ 13,674 | $ (21,877) | $ 2,353 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Money market funds - USD ($) $ in Thousands | Sep. 30, 2023 | Oct. 01, 2022 |
Assets: | ||
Money market funds (cash equivalents) | $ 51,522 | $ 187,170 |
Level 1 | ||
Assets: | ||
Money market funds (cash equivalents) | 51,522 | 187,170 |
Level 2 | ||
Assets: | ||
Money market funds (cash equivalents) | 0 | 0 |
Level 3 | ||
Assets: | ||
Money market funds (cash equivalents) | $ 0 | $ 0 |
Revenue and Geographic Inform_3
Revenue and Geographic Information - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Jan. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 305,147 | $ 373,356 | $ 304,173 | $ 672,579 | $ 316,290 | $ 371,783 | $ 399,781 | $ 664,481 | $ 1,655,255 | $ 1,752,336 | $ 1,716,744 |
Sonos speakers | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,293,440 | 1,368,916 | 1,378,808 | ||||||||
Sonos system products | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 285,064 | 297,110 | 265,180 | ||||||||
Partner products and other revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 76,751 | 86,310 | 72,756 | ||||||||
Americas | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,048,245 | 1,044,113 | 980,931 | ||||||||
Europe, Middle East and Africa ("EMEA") | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 518,179 | 578,034 | 618,476 | ||||||||
Asia Pacific ("APAC") | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 88,831 | 130,189 | 117,337 | ||||||||
United States | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 971,151 | 964,118 | 890,837 | ||||||||
Other countries | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 684,104 | $ 788,218 | $ 825,907 |
Revenue and Geographic Inform_4
Revenue and Geographic Information - Disaggregation of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Oct. 01, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 87,075 | $ 86,168 |
China | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 32,045 | 40,609 |
United States | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 30,430 | 30,870 |
Other countries | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 24,600 | $ 14,689 |
Balance sheet Components - Addi
Balance sheet Components - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Business Acquisition [Line Items] | |||
Inventory write down | $ 29.7 | $ 8.8 | |
Depreciation expense | 42.7 | 33.3 | $ 31.8 |
Fixed asset, disposal | 21.3 | 18.9 | 32.9 |
Accumulated depreciation and amortization | 21.1 | 18.8 | $ 32.2 |
Recognition of revenue | $ 80 | 73.8 | |
Mayht Holding BV [Member] | In-process Research and Development Activity [Member] | |||
Business Acquisition [Line Items] | |||
Intangible not subject to amortization | $ 71.8 |
Balance Sheet Components - Summ
Balance Sheet Components - Summary of Changes in Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 2,744 | $ 1,547 | $ 1,307 |
Increases | 1,561 | 2,098 | 1,529 |
Write-offs | (1,594) | (901) | (1,289) |
Ending balance | $ 2,711 | $ 2,744 | $ 1,547 |
Balance Sheet Components - Su_2
Balance Sheet Components - Summary of Changes In Allowance for Sales Incentives (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Allowance for Sales Incentives [Roll Forward] | |||
Beginning balance | $ 23,573 | $ 19,160 | $ 17,515 |
Charged to revenue | 139,657 | 51,225 | 95,249 |
Utilization of sales incentive allowance | (134,155) | (46,812) | (93,604) |
Ending balance | $ 29,075 | $ 23,573 | $ 19,160 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Inventories, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Oct. 01, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Finished goods | $ 281,571 | $ 406,657 |
Components | 64,950 | 47,631 |
Inventories | $ 346,521 | $ 454,288 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Oct. 01, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 279,762 | $ 256,389 |
Accumulated depreciation and amortization | (192,687) | (170,221) |
Property and equipment, net | 87,075 | 86,168 |
Computer hardware and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 41,679 | 42,000 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6,971 | 7,511 |
Tooling and production line test equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 108,693 | 100,337 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 53,648 | 49,656 |
Product displays | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 68,771 | $ 56,885 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of Goodwill (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | $ 77,300 |
Effect of exchange rate changes on goodwill | 3,120 |
Goodwill ending balance | $ 80,420 |
Balance Sheet Components - Fini
Balance Sheet Components - Finite-lived intangible assets, future amortization expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 31,931 | |
Accumulated Amortization | (11,701) | |
Net Carrying Value | 20,218 | |
Finite lived intangible assets, impact | (12) | |
In-process research and development and other intangible assets not subject to amortization, impact | (1,980) | |
In-process research and development and other intangible assets not subject to amortization, Net | 69,791 | $ 64,680 |
Intangible assets, gross carrying amount (excluding goodwill) | 103,690 | |
Intangible assets, net carrying value (excluding goodwill) | $ 90,009 | |
Weighted-Average Remaining Life | 4 years 10 months 17 days | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2024 | $ 5,969 | |
2025 | 3,367 | |
2026 | 3,038 | |
2027 | 3,022 | |
2028 and thereafter | 4,822 | |
Net Carrying Value | 20,218 | |
In-process research and development and other intangible assets not subject to amortization | ||
Finite-Lived Intangible Assets [Line Items] | ||
In-process research and development and other intangible assets not subject to amortization, impact | (1,968) | |
In-process research and development and other intangible assets not subject to amortization, Net | 69,791 | |
Indefinite-lived intangible assets (excluding goodwill) | 71,759 | |
Tradename | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 451 | |
Accumulated Amortization | (113) | |
Net Carrying Value | 326 | |
Finite lived intangible assets, impact | $ (12) | |
Weighted-Average Remaining Life | 4 years 6 months | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Net Carrying Value | $ 326 | |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 31,480 | |
Accumulated Amortization | (11,588) | |
Net Carrying Value | $ 19,892 | |
Weighted-Average Remaining Life | 4 years 10 months 20 days | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Net Carrying Value | $ 19,892 |
Balance Sheet Components - Sc_4
Balance Sheet Components - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Oct. 01, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued inventory and supply chain costs | $ 48,384 | $ 51,011 |
Accrued advertising and marketing | 13,029 | 21,292 |
Accrued taxes | 11,410 | 7,081 |
Accrued general and administrative | 9,924 | 21,634 |
Accrued product development | 4,298 | 8,168 |
Other accrued payables | 2,672 | 104 |
Total accrued expenses | $ 89,717 | $ 109,290 |
Balance Sheet Components - Su_3
Balance Sheet Components - Summary of Changes in Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Deferred Revenue Arrangement [Line Items] | |||
Deferred revenue | $ 80,838 | $ 83,470 | $ 89,498 |
Contract with Customer, Liability [Roll Forward] | |||
Deferred revenue, beginning of period | 83,470 | 89,498 | 62,389 |
Recognition of revenue included in beginning of period deferred revenue | (27,057) | (41,438) | (19,175) |
Revenue deferred, net of revenue recognized on contracts in the respective period | 24,425 | 35,410 | 46,284 |
Deferred revenue, end of period | $ 80,838 | $ 83,470 | $ 89,498 |
Balance Sheet Components - Sc_5
Balance Sheet Components - Schedule of Expected Recognition of Deferred Revenue (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized | $ 80,838 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 4 years |
Revenue expected to be recognized | $ 20,188 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-09-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 2 years |
Revenue expected to be recognized | $ 17,086 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-09-28 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 3 years |
Revenue expected to be recognized | $ 14,718 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-09-27 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 1 year |
Revenue expected to be recognized | $ 12,088 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-09-26 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, period | 5 years |
Revenue expected to be recognized | $ 16,758 |
Balance Sheet Components - Sc_6
Balance Sheet Components - Schedule of Expected Recognition of Deferred Revenue 1 (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized | $ 80,838 |
Balance Sheet Components - Sc_7
Balance Sheet Components - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Oct. 01, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Reserve for returns | $ 21,462 | $ 18,263 |
Short-term operating lease liabilities | 1,153 | 10,532 |
Product warranty liability | 7,466 | 5,771 |
Other | 4,172 | 5,083 |
Total other current liabilities | $ 34,253 | $ 39,649 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total other current liabilities | Total other current liabilities |
Balance Sheet Components - Sc_8
Balance Sheet Components - Schedule of Warranty Liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Warranty liability, beginning of period | $ 5,771 | $ 5,604 |
Provision for warranties issued during the period | 12,517 | 13,033 |
Settlements of warranty claims during the period | (10,822) | (12,866) |
Warranty liability, end of period | $ 7,466 | $ 5,771 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 12 Months Ended | |||
Jul. 13, 2023 ft² | May 11, 2023 USD ($) | Sep. 30, 2023 USD ($) | Oct. 01, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Term of option to extend | 5 years | |||
Termination option period | 1 year | |||
Weighted-average discount rate - operating leases | 5.14% | |||
Weighted-average remaining lease term (years) - operating leases | 9 years 1 month 6 days | |||
Operating lease extension period | The lease expires in May 2031, with no option to extend | |||
Office space under lease agreement | ft² | 50,000 | |||
Lease expiration date | May 31, 2031 | |||
Rental expense | $ 12.7 | $ 11.3 | ||
Common area maintenance expense | $ 5.5 | $ 4.3 | ||
Lafayette City Center | ||||
Lessee, Lease, Description [Line Items] | ||||
Operating lease extension period | an extension of the lease term through July 2035 | |||
Operating lease increase in right of use asset | $ 31.6 | |||
Operating lease increase in lease liability | $ 30.4 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2023 USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 12,324 |
Short-term lease cost | 340 |
Variable lease cost | 5,480 |
Total lease cost | $ 18,144 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 4,415 |
2025 | 9,579 |
2026 | 7,888 |
2027 | 6,395 |
2028 | 5,841 |
Thereafter | 41,040 |
Total lease payments | 75,158 |
Less imputed interest | (19,049) |
Total lease liabilities | $ 56,109 |
Debt - Additional Information (
Debt - Additional Information (Details) - Credit Facility - Revolving Credit Facility - USD ($) $ in Millions | 1 Months Ended | ||
Oct. 13, 2021 | Jun. 30, 2023 | Sep. 30, 2023 | |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 100 | ||
Term of debt | 5 years | ||
Undrawn letters of credit | $ 1.8 | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.20% | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.275% | ||
Base Rate | |||
Debt Instrument [Line Items] | |||
Interest rate, spread on variable rate | 1% | ||
SOFR | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate, spread on variable rate | 0.11% | ||
SOFR | Maximum | |||
Debt Instrument [Line Items] | |||
Interest rate, spread on variable rate | 0.43% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Sep. 30, 2023 | Nov. 16, 2022 | |
Equity [Abstract] | ||
Stock repurchase program, authorized amount | $ 100 | |
Repurchase of common stock (in shares) | (6,555,702) | |
Purchase price of common stock | $ 100 | |
Average price per share (in dollars per share) | $ 15.25 | |
Retirement of treasury stock (in shares) | (6,138,129) |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jul. 31, 2018 | Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in shares) | 0 | 0 | 0 | |
Fair value of options vested | $ 2,600,000 | $ 6,600,000 | $ 10,800,000 | |
Intrinsic value of stock options exercised | $ 15,300,000 | $ 58,000,000 | $ 242,700,000 | |
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 48 months | |||
Exercisable period | 10 years | |||
Unrecognized stock-based compensation expense, period of recognition | 2 months 12 days | |||
Unrecognized stock-based compensation expense | $ 0 | $ 400,000 | ||
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Unrecognized stock-based compensation expense, period of recognition | 2 years 4 months 24 days | 2 years 6 months | ||
Unrecognized stock-based compensation expense | $ 111,600,000 | $ 120,600,000 | ||
Performance Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized stock-based compensation expense, period of recognition | 1 year 2 months 12 days | 7 months 6 days | ||
Performance achievement adjustments | 12,895 | |||
Unrecognized stock-based compensation expense | $ 300,000 | $ 400,000 | ||
2018 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of outstanding stock maximum | 5% | |||
Shares reserved for future issuance (in shares) | 42,317,925 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Sep. 30, 2023 | Oct. 01, 2022 | |
Number of Options | ||
Beginning balance (in shares) | 10,802,882 | |
Exercised (in shares) | (2,005,776) | |
Forfeited (in shares) | (247,149) | |
Ending balance (in shares) | 8,549,957 | 10,802,882 |
Options exercisable (in shares) | 8,549,957 | |
Options vested and expected to vest (in shares) | 8,549,957 | |
Weighted Average Exercise Price | ||
Beginning balance (in USD per share) | $ 13.37 | |
Exercised (in USD per share) | 10.64 | |
Forfeited (in USD per share) | 14.2 | |
Ending balance (in USD per share) | 13.99 | $ 13.37 |
Option exercisable - Weighted Average Exercise Price (in USD per share) | 13.99 | |
Options vested and expected to vest - Weighted Average Exercise Price (in USD per share) | $ 13.99 | |
Additional Information | ||
Weighted-Average Remaining Contractual Term | 3 years 7 months 6 days | 4 years 6 months |
Options exercisable - Weighted Average Remaining Contractual Term | 3 years 7 months 6 days | |
Options vested and expected to vest - Weighted Average Remaining Contractual Term | 3 years 7 months 6 days | |
Aggregate Intrinsic Value | $ 1,689 | $ 10,956 |
Options exercisable - Average Intrinsic Value | 1,689 | |
Options vested and expected to vest - Average Intrinsic Value | $ 1,689 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Activity (Details) - Restricted stock units $ / shares in Units, $ in Thousands | 12 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Number of Units | |
Outstanding, beginning balance (in shares) | shares | 8,308,177 |
Granted (in shares) | shares | 5,272,828 |
Released (in shares) | shares | (4,458,367) |
Forfeited (in shares) | shares | (1,460,603) |
Outstanding, ending balance (in shares) | shares | 7,662,035 |
Units expected to vest (in shares) | shares | 6,618,791 |
Weighted-Average Grant Date Fair Value | |
Outstanding, beginning balance (in USD per share) | $ / shares | $ 19.25 |
Granted (in USD per share) | $ / shares | 17.33 |
Released (in USD per share) | $ / shares | 16.66 |
Forfeited (in USD per share) | $ / shares | 19.34 |
Outstanding, ending balance (in USD per share) | $ / shares | 19.42 |
Vested and expected to vest - Weighted Average Exercise Price (in dollars per share) | $ / shares | $ 19.39 |
Additional Information | |
Aggregate Intrinsic Value, beginning balance | $ | $ 115,484 |
Aggregate Intrinsic Value, ending balance | $ | 98,917 |
Vested and expected to vest - Weighted Average Intrinsic Value | $ | $ 85,449 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Stock Units Activity (Details) - Performance Stock Units $ / shares in Units, $ in Thousands | 12 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Number of Units | |
Outstanding, beginning balance (in shares) | shares | 398,077 |
Granted (in shares) | shares | 249,370 |
Released (in shares) | shares | (263,158) |
Forfeited (in shares) | shares | (119,098) |
Outstanding, ending balance (in shares) | shares | 265,191 |
Weighted-Average Grant Date Fair Value | |
Outstanding, beginning balance (in USD per share) | $ / shares | $ 26.96 |
Granted (in USD per share) | $ / shares | 17.54 |
Released (in USD per share) | $ / shares | 26.26 |
Forfeited (in USD per share) | $ / shares | 21.45 |
Outstanding, ending balance (in USD per share) | $ / shares | $ 21.27 |
Additional Information | |
Aggregate Intrinsic Value, beginning balance | $ | $ 5,533 |
Aggregate Intrinsic Value, ending balance | $ | $ 3,424 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | $ 76,857 | $ 75,640 | $ 62,127 |
Cost of revenue | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 2,038 | 1,620 | 988 |
Research and development | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 35,530 | 30,724 | 25,075 |
Sales and marketing | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | 15,677 | 15,335 | 13,570 |
General and administrative | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation expense | $ 23,612 | $ 27,961 | $ 22,494 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Before Provision For (Benefit From) Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (9,904) | $ 54,609 | $ 126,810 |
Foreign | 14,298 | 14,121 | 30,115 |
Income before provision for (benefit from) income taxes | $ 4,394 | $ 68,730 | $ 156,925 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision For (Benefit From) Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Current: | |||
U.S. Federal | $ 7,507 | ||
U.S. State | 4,947 | $ 483 | $ 440 |
Foreign | 2,810 | 3,401 | 6,216 |
Total current | 15,264 | 3,884 | 6,656 |
Deferred: | |||
U.S. Federal | (1,459) | ||
U.S. State | (21) | ||
Foreign | (596) | (1,057) | (8,326) |
Total deferred | (596) | (2,537) | (8,326) |
Provision for (benefit from) income taxes | $ 14,668 | $ 1,347 | $ (1,670) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | Oct. 03, 2020 |
Deferred tax assets | ||||
Research & development tax credit carryforwards | $ 75,593 | $ 92,487 | ||
Capitalized research & development | 63,395 | 9,420 | ||
Accrued expenses and reserves | 17,837 | 8,872 | ||
Deferred revenue | 15,855 | 14,170 | ||
Operating lease liability | 13,097 | 7,717 | ||
Stock-based compensation | 7,727 | 9,261 | ||
Foreign net operating loss carryforwards | 7,606 | 7,702 | ||
Other capitalized costs | 5,364 | 3,799 | ||
Depreciation | 2,700 | 2,239 | ||
U.S. net operating loss carryforwards | 1,852 | 26,363 | ||
Other | 494 | 182 | ||
Total deferred tax assets | 211,520 | 182,212 | ||
Valuation allowance | (185,840) | (162,267) | $ (155,978) | $ (113,939) |
Deferred tax assets, net of valuation allowance | 25,680 | 19,945 | ||
Deferred tax liabilities | ||||
Intangibles | (22,475) | (22,125) | ||
Right-of-use asset | (11,392) | (5,940) | ||
Other | (14) | |||
Total deferred tax liabilities | (33,867) | (28,079) | ||
Net deferred tax assets (liabilities) | (8,187) | (8,134) | ||
Deferred tax assets | 1,659 | 1,508 | ||
Deferred tax liabilities | $ (9,846) | $ (9,642) |
Income Taxes - Textual (Details
Income Taxes - Textual (Details) | 12 Months Ended |
Sep. 30, 2023 USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Undistributed earnings | $ 6,400,000 |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards, utilized amount | 84,900,000 |
Net operating loss carryforwards | 0 |
Federal | Research tax credit carryforward | |
Operating Loss Carryforwards [Line Items] | |
Tax credit carryforward | 54,400,000 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 25,400,000 |
State | Research tax credit carryforward | |
Operating Loss Carryforwards [Line Items] | |
Tax credit carryforward | 47,000,000 |
Foreign | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 46,900,000 |
Income Taxes - Summary of Chang
Income Taxes - Summary of Changes in Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Valuation Allowance [Roll Forward] | |||
Beginning balance | $ 162,267 | $ 155,978 | $ 113,939 |
Increase during the period | 23,628 | 13,841 | 49,791 |
Decrease during the period | (55) | (7,552) | (7,752) |
Ending balance | $ 185,840 | $ 162,267 | $ 155,978 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. federal income taxes at statutory rate | $ (923) | $ 14,433 | $ 32,954 |
U.S. state and local income taxes, net of federal benefit and state credits | (841) | (2,594) | (9,473) |
Foreign income tax rate differential | 734 | 970 | 1,430 |
Stock-based compensation | 104 | (15,532) | (47,496) |
Federal research and development tax credits | (7,591) | (8,983) | (21,535) |
Unrecognized federal tax benefits | 184 | (2,482) | 4,041 |
Change in tax rate | 5,013 | (2,681) | |
Global intangible low taxed income, net of foreign tax credits | 1,234 | 290 | |
Foreign -derived intangible income (FDII) deduction | (6,863) | ||
Subpart F income | 1,374 | ||
162(m) executive compensation limitation | 2,513 | 2,574 | |
Other | (695) | 1,079 | (565) |
Change in valuation allowance | 23,592 | 6,579 | 41,655 |
Provision for income taxes | $ 14,668 | $ 1,347 | $ (1,670) |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 17,021 | $ 21,252 | $ 14,721 |
Decrease - tax positions in prior periods | (566) | (6,039) | (4) |
Increase - tax positions in current periods | 1,164 | 1,808 | 6,535 |
Ending balance | $ 17,619 | $ 17,021 | $ 21,252 |
Net Income (Loss) Per Share A_3
Net Income (Loss) Per Share Attributable to Common Stockholders - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Jan. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Numerator: | |||||||||||
Net income (loss) | $ (31,239) | $ (23,571) | $ (30,652) | $ 75,188 | $ (64,067) | $ (597) | $ 8,566 | $ 123,481 | $ (10,274) | $ 67,383 | $ 158,595 |
Denominator: | |||||||||||
Weighted-average shares of common stock - basic (in shares) | 127,702,885 | 127,691,030 | 122,245,212 | ||||||||
Weighted-average shares of common stock - diluted (in shares) | 127,702,885 | 137,762,078 | 140,309,152 | ||||||||
Net income (loss) per share attributable to common stockholders: | |||||||||||
Net income (loss) per share attributable to common stockholders - basic (in USD per share) | $ (0.25) | $ (0.18) | $ (0.24) | $ 0.59 | $ (0.5) | $ 0 | $ 0.07 | $ 0.97 | $ (0.08) | $ 0.53 | $ 1.3 |
Net income (loss) per share attributable to common stockholders - diluted (in USD per share) | $ (0.25) | $ (0.18) | $ (0.24) | $ 0.57 | $ (0.5) | $ 0 | $ 0.06 | $ 0.87 | $ (0.08) | $ 0.49 | $ 1.13 |
Employee Stock Option | |||||||||||
Denominator: | |||||||||||
Effect of potentially dilutive stock options, RSUs, and PSUs (in shares) | 5,472,807 | 10,120,238 | |||||||||
Restricted stock units | |||||||||||
Denominator: | |||||||||||
Effect of potentially dilutive stock options, RSUs, and PSUs (in shares) | 4,385,406 | 7,875,245 | |||||||||
Performance Stock Units | |||||||||||
Denominator: | |||||||||||
Effect of potentially dilutive stock options, RSUs, and PSUs (in shares) | 212,835 | 68,457 |
Net Income (Loss) Per Share A_4
Net Income (Loss) Per Share Attributable to Common Stockholders - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially antidilutive securities (in shares) | 19,342,339 | 12,007,847 | 12,590,730 |
Stock options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially antidilutive securities (in shares) | 9,449,904 | 6,877,530 | 9,030,004 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially antidilutive securities (in shares) | 9,742,444 | 5,041,645 | 3,505,140 |
Performance Stock Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially antidilutive securities (in shares) | 149,991 | 88,672 | 55,586 |
Commitments and Contingencies -
Commitments and Contingencies - Textual (Details) | 1 Months Ended | 12 Months Ended | |||
Mar. 10, 2017 Patent | May 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Oct. 01, 2022 USD ($) | Sep. 29, 2023 USD ($) | |
Loss Contingencies [Line Items] | |||||
Amount awarded to other party | $ 32,500,000 | ||||
Royality rate per infringing unit | 2.3 | ||||
Purchase Commitment | |||||
Loss Contingencies [Line Items] | |||||
Purchase commitments | $ 70,000,000 | ||||
Commitments expected to be paid | 6 months | ||||
Supply Commitment | |||||
Loss Contingencies [Line Items] | |||||
Commitments to suppliers | $ 256,000,000 | $ 226,000,000 | |||
Commitments expected to be paid | 2 years | ||||
Implicit, LLC | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, patents allegedly infringed upon, number | Patent | 2 | ||||
Government | |||||
Loss Contingencies [Line Items] | |||||
Income tax examination, refund | $ 10,400,000 | $ 15,800,000 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2023 | Jul. 01, 2023 | Apr. 01, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | Jul. 02, 2022 | Apr. 02, 2022 | Jan. 01, 2022 | Sep. 30, 2023 | Oct. 01, 2022 | Oct. 02, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 305,147 | $ 373,356 | $ 304,173 | $ 672,579 | $ 316,290 | $ 371,783 | $ 399,781 | $ 664,481 | $ 1,655,255 | $ 1,752,336 | $ 1,716,744 |
Gross profit | 128,054 | 171,762 | 131,618 | 285,057 | 124,099 | 175,848 | 179,034 | 317,385 | 716,490 | 796,367 | 809,994 |
Net Income (Loss) | $ (31,239) | $ (23,571) | $ (30,652) | $ 75,188 | $ (64,067) | $ (597) | $ 8,566 | $ 123,481 | $ (10,274) | $ 67,383 | $ 158,595 |
Net income (loss) per share - basic | $ (0.25) | $ (0.18) | $ (0.24) | $ 0.59 | $ (0.5) | $ 0 | $ 0.07 | $ 0.97 | $ (0.08) | $ 0.53 | $ 1.3 |
Net income (loss) per share - diluted | $ (0.25) | $ (0.18) | $ (0.24) | $ 0.57 | $ (0.5) | $ 0 | $ 0.06 | $ 0.87 | $ (0.08) | $ 0.49 | $ 1.13 |
Restructuring Plan - Additional
Restructuring Plan - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Jul. 01, 2023 | Sep. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | |||
Percent of reduction in force | 7% | ||
Restructuring costs | $ 11.4 | ||
non-recurring abandonment charges | $ 4.8 | $ 4.8 |
Restructuring Plan - Summary of
Restructuring Plan - Summary of Restructuring and Abandonment Costs by Major Cost-type Incurred (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring and Related Activities [Abstract] | |
Employee-related costs | $ 9,083 |
Lease abandonment charges | 5,600 |
Other restructuring costs | 966 |
Total restructuring and abandonment costs | $ 15,649 |
Restructuring Plan - Summary _2
Restructuring Plan - Summary of Restructuring and Abandonment Costs by Major Cost-type Incurred (Parenthetical) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | ||
Non-recurring write-offs for operating lease right-of-use assets and accelerated depreciation of the related leasehold improvements | $ 4.8 | $ 4.8 |
Restructuring Plan - Summary _3
Restructuring Plan - Summary of Restructuring And Abandonment Costs Recorded In Consolidated Statements of Operations and Comprehensive Income (loss) (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and abandonment costs | $ 15,649 |
Research and development | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and abandonment costs | 6,556 |
Sales and marketing | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and abandonment costs | 5,635 |
General and administrative | |
Restructuring Cost and Reserve [Line Items] | |
Total restructuring and abandonment costs | $ 3,458 |
Restructuring Plan - Summary _4
Restructuring Plan - Summary of Restructuring Activities Recorded in Accrued Expenses and Accrued Compensation (Details) $ in Thousands | 3 Months Ended |
Jul. 01, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Balance as of October 1, 2022 | |
Restructuring charges | 10,105 |
Cash paid | (7,981) |
Balance as of September 30, 2023 | 2,124 |
Employee Severance | |
Restructuring Cost and Reserve [Line Items] | |
Balance as of October 1, 2022 | |
Restructuring charges | 9,083 |
Cash paid | (7,015) |
Balance as of September 30, 2023 | 2,068 |
Lease Abandonment and Other Restructuring Costs | |
Restructuring Cost and Reserve [Line Items] | |
Balance as of October 1, 2022 | |
Restructuring charges | 1,022 |
Cash paid | (966) |
Balance as of September 30, 2023 | $ 56 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) - USD ($) $ in Millions | Nov. 15, 2023 | Nov. 16, 2022 |
Subsequent Event [Line Items] | ||
Stock repurchase program, authorized amount | $ 100 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Stock repurchase program, authorized amount | $ 200 |