Sonos, Inc. (NASDAQ:SONO) Q4 2019 Earnings Conference Call - Final Transcript

Nov 20, 2019 • 05:00 pm ET

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Sonos, Inc. (NASDAQ:SONO) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to Sonos Fourth Quarter and Fiscal 2019 Conference Call. [Operator Instructions] After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Ms. Cammeron McLaughlin, Sonos Investor Relations. Thank you. Please go ahead.

Executive
Cammeron McLaughlin

Thank you. Good afternoon, and welcome to Sonos' fourth quarter and fiscal 2019 earnings conference call. I am Cammeron McLaughlin, and with me today are Sonos' CEO, Patrick Spence; and CFO, Brittany Bagley. For those joining the call early, today's hold music comes from a playlist inspired by the launch of Sonos Move, and is included in our shareholder letter today.

Before I hand it over to Patrick, I would like to remind everyone that today's discussion will include forward-looking statements regarding future events and our future financial performance. These statements reflect our views as of today only, and should not be considered as representing our views of any subsequent date. These statements are also subject to material risks and uncertainties that could cause actual results to differ materially from expectations reflected in the forward-looking statements. A discussion of these risk factors is fully detailed under the caption Risk Factors in our filings with the SEC.

During this call, we will also refer to non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, and free cash flow. For complete information regarding our non-GAAP financial information and a reconciliation of those measures, please refer to our today's shareholder letter regarding our fourth quarter and fiscal 2019 results, posted to the Investor Relations portion of our website.

With that, I'll turn the call over to Patrick.

Executive
Patrick Spence

Thank you, Cammeron, and thanks to all of you for joining us today, as we report on our first full fiscal year as a public company. As we get started, I want to ground us in the journey we've been on and what we set out to achieve this past year. When I took on the role of Sonos' CEO, almost three years ago, we set out to do two things. The first was to accelerate our pace of new product introductions, both in terms of new products extending our leadership in the home, and new products that take us into categories beyond the home. And the second was to deliver sustainable profitable growth on a consistent basis. As we exit 2019, I'm pleased to report major progress on both fronts, while continuing our run of record-setting results.

Revenue for fiscal 2019 increased a 11% to a record $1.261 billion, and adjusted EBITDA increased 28% to $89 million. This marks the third consecutive year, we've exceeded the financial goals we set forth of 10-percent-plus revenue and 20-percent-plus adjusted EBITDA growth, as well as achieving the important milestone of positive free cash flow. We generated more than $97 million in free cash flow in fiscal 2019, ending the year with $339 million in cash. Moreover, we achieved these cash flow metrics,