The same can be said of SONO as its revenue declined precipitously in Q2, generating a much wider net loss as compared to the year ago period. It also should be noted that the other IPO to price today, Cushman & Wakefield (CWK), fared just fine as its deal priced at the mid-point of expectations at $17.
In other words, it is probably not accurate to say that there is some significant change with the dynamics of the IPO market. At least not yet.
Circling back to SONOs' IPO, it generated $208.5 mln in gross proceeds, about 17% less than it had anticipated. The lead underwriters on the deal were Morgan Stanley, Goldman Sachs, and Allen & Co. Shares are slated to open for trading later this morning on the Nasdaq.
SONO is an inventor of wireless multi-room home audio products. Its products include wireless speakers, home theater speakers, and components to address consumers’ evolving home audio needs. As of March 31, 2018, its customers had registered over 19 mln products in approximately 6.9 mln households globally.
SONO launched its first voice-enabled wireless speaker, Sonos One, in October 2017, and its first voice-enabled home theater speaker, Sonos Beam, in July 2018.
In addition to new product launches, it frequently introduce new features through software upgrades, providing its customers with enhanced functionality and improved sound in the home.
The company's network of partners provides its customers with access to voice control, streaming music, internet radio, podcasts, and audiobook content, enabling them to control and listen to an expansive range of home entertainment. More specifically, its platform includes approximately 100 streaming content providers, such as Apple Music, Pandora, Spotify, and TuneIn.
In regard to its business model, SONO generates revenue from the sale of its wireless speakers, home theater speakers and component products, as new customers buy its products and existing customers continue to add products to their Sonos home sound systems. In fiscal 2017, existing customers accounted for approximately 38% of new product registrations.
Taking a look at the financials, the company provided some preliminary results for Q2 in its IPO prospectus. Specifically, it is projecting revenue of $206.4-$208.4 mln, compared to revenue of $223.1 mln for the three months ended July 1, 2017. Expected revenue declined predominately due to an expected decrease in PLAYBASE revenue. PLAYBASE launched as a new product in the quarter ended July 1, 2017, which resulted in a large increase in revenue as its retail partners purchased their initial PLAYBASE inventory.
It expects a net loss of between ($29.0)- ($27.1) mln, compared to a net loss of ($14.5) mln for the three months ended July 1, 2017. The expected increase in net loss is primarily due to the expected decrease in revenue.
SONO expects adjusted EBITDA to be a loss of between ($3.8)-($1.6) mln, compared to earnings of $2.3 mln in the year ago period.