3. Financial Instruments

The carrying values of the Company’s accounts receivable and accounts payable, approximate their fair values due to the short period of time to maturity or repayment. The following table summarizes cash, cash equivalents and marketable securities by investment category as of September 27, 2025, and September 28, 2024:


	September 27, 2025
	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	158,556	$	—	$	—	$	158,556	$	158,556	$	—
Level 1:
Money market funds	16,112		—		—		16,112		16,112		—
Subtotal	16,112		—		—		16,112		16,112		—
Level 2:
U.S. Treasury securities	52,834		32		(8)		52,858		—		52,858
Subtotal	52,834		32		(8)		52,858		—		52,858
Total	227,502		32		(8)		227,526		174,668		52,858


	September 28, 2024
	Amortized Cost		Unrealized Gain		Unrealized Loss		Estimated Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	144,184	$	—	$	—	$	144,184	$	144,184	$	—
Level 1:
Money market funds	25,548		—		—		25,548		25,548		—
Subtotal	25,548		—		—		25,548		25,548		—
Level 2:
U.S. Treasury securities	51,304		122		—		51,426		—		51,426
Subtotal	51,304		122		—		51,426		—		51,426
Total	221,036		122		—		221,158		169,732		51,426

Marketable Securities

As of September 27, 2025, and September 28, 2024, the Company held no securities with original maturities exceeding one year. There were no realized gains or losses on sales of marketable securities during fiscal 2025, and fiscal 2024.

For securities in an unrealized loss position, the Company does not intend to sell the securities, and it is more-likely-than-not that it will not be required to sell before recovery of their amortized cost basis. The Company evaluated whether the decline in fair value resulted from credit losses or other factors and concluded these amounts were related to temporary fluctuations in value of the securities and were due primarily to changes in interest rates and market conditions of the underlying securities. Accordingly, an allowance for credit losses was deemed unnecessary for these securities as of September 27, 2025.

Accrued interest receivable related to our marketable securities was nominal as of September 27, 2025, and September 28, 2024. No accrued interest receivables were written off during fiscal 2025, and fiscal 2024.

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Sonos Inc Fair Value Disclosure

About Fair Value Disclosures

Other Available Disclosures