Sonos (NASDAQ:SONO) Releases Quarterly Earnings Results, Beats Expectations By $0.22 EPS

Sonos (NASDAQ:SONO) released its quarterly earnings data on Tuesday. The company reported $0.04 earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.18) by $0.22, FiscalAI reports. Sonos had a net margin of 5.79% and a return on equity of 20.85%. The firm had revenue of $344.44 million for the quarter, compared to analysts’ expectations of $340.33 million. During the same quarter last year, the business posted ($0.06) earnings per share. The company’s revenue for the quarter was up 19.6% compared to the same quarter last year.

Here are the key takeaways from Sonos’ conference call:

• Sonos returned to growth in fiscal 2026, with revenue up 7% to $1.55 billion; fourth-quarter revenue rose 20% year over year, or 11% excluding the extra week. Growth was reported across all three regions.
• Profitability improved substantially: full-year adjusted EBITDA increased 39% to $184 million, and free cash flow rose 14% to $123 million. The company also completed $130 million in share repurchases and authorized a new $150 million program.
• Higher memory costs remain a major margin headwind. They reduced fiscal 2026 adjusted EBITDA by $56 million, and Sonos expects Q1 gross margin to fall about 1,000 basis points year over year, with memory and component costs contributing roughly 1,200 basis points of pressure.
• Management expects fiscal 2027 revenue growth and Q1 revenue of $570 million–$630 million, up 4%–15% year over year. It expects memory-cost mitigation to deliver about 500 basis points of annualized gross-margin improvement by the end of FY2027, while investing in new products, software and AI features.

Sonos Stock Performance

SONO stock traded up $0.29 during midday trading on Thursday, reaching $19.35. 436,921 shares of the company traded hands, compared to its average volume of 1,771,772. Sonos has a 52-week low of $12.44 and a 52-week high of $19.82. The business has a 50 day moving average of $16.85 and a 200-day moving average of $15.32. The firm has a market capitalization of $2.29 billion, a price-to-earnings ratio of 26.76 and a beta of 1.94.

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on SONO. Wall Street Zen lowered shares of Sonos from a “strong-buy” rating to a “buy” rating in a research report on Saturday, August 22nd. Rosenblatt Securities reiterated a “buy” rating and issued a $21.00 price target on shares of Sonos in a report on Thursday, July 30th. Finally, Weiss Ratings upgraded shares of Sonos from a “hold (c)” rating to a “hold (c+)” rating in a research note on Tuesday, October 13th. Two research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company. According to MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus target price of $20.00.

Insider Activity at Sonos

In other news, Director Karen Boone sold 46,766 shares of Sonos stock in a transaction that occurred on Friday, September 25th. The stock was sold at an average price of $18.13, for a total value of $847,867.58. Following the completion of the transaction, the director owned 69,271 shares in the company, valued at approximately $1,255,883.23. The trade was a 40.30% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 1.25% of the company’s stock.

About Sonos

Sonos, Inc. designs and sells wireless audio products and software for home entertainment. Its lineup includes wireless speakers, soundbars, subwoofers, amplifiers and related components that can be used individually or connected through the Sonos platform to play audio in multiple rooms. The company’s products support music and other audio from a range of streaming services, as well as television and home theater setups. Sonos also offers software and services, including Sonos Radio, and sells products through its website and retail partners in markets around the world.