Sonos to Report Q4 Earnings: What Should Investors Expect?

Sonos, Inc. SONO is scheduled to report fourth-quarter fiscal 2025 results on Nov. 5, before market opens.

For the quarter, SONO anticipates revenues between $260 million and $290 million, implying a year-over-year increase of 2% to 14%. The Zacks Consensus Estimate for revenues is pegged at $283.1 million, indicating growth of 10.8% from the year-ago reported number.

The consensus estimate for earnings is pegged at 5 cents. It had reported 18 cents in the prior-year quarter.

The company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and met in two, with the average surprise being 23.9%.

In the past year, shares of SONO have soared 22.1% compared with the Zacks Audio Video Production industry’s growth of 50.2%.

Factors Shaping SONO’s Q4 Results

Sonos remains committed to driving growth through an innovative product lineup. On the last earnings call, the company introduced AI-powered voice enhancement for Arc Ultra and advanced adaptive noise cancellation for Sonos Ace. Also, continued demand for flagship products like the Arc Ultra and Sub 4 is likely to have bolstered revenue momentum.

Management highlighted that in the fiscal third quarter, the Era 100 speaker was repriced to under $200, matching the price of its predecessors, to attract new households and drive long-term system expansion. The company plans to maintain a cadence of two hardware launches per year, with a focus on software-driven differentiation and a strong product roadmap for future innovation. Building on this momentum, Sonos has a robust product roadmap in place, stretching through fiscal 2026 and beyond.

Sonos’ ongoing expansion of its direct-to-consumer initiatives, broader partner ecosystem and growing international presence, particularly in Asia, are likely to have supported its fourth-quarter performance.

For the fourth quarter, the company projects GAAP gross margin to be between 42% and 44%, and non-GAAP gross margin of 43.7% to 45.5%. Non-GAAP operating expenses are expected to be between $130 million and $135 million, down 6% to 9% from $143 million last year, and roughly flat on a sequential basis.
Adjusted EBITDA is anticipated to range from a loss of $10 million to a gain of $14 million, suggesting a margin between -4% and 5%. This marks a notable improvement from the negative EBITDA of $22.6 million a year ago.

Sonos, Inc. Price and EPS Surprise

Sonos, Inc. price-eps-surprise | Sonos, Inc. Quote

However, Sonos’ fiscal fourth-quarter performance is likely to have been adversely impacted by multiple headwinds, which includes cautious discretionary spending higher promotions and uncertain tariff policy. Sonos continues to navigate these challenges that might hurt its margins and weaken its competitive edge.

On the last earnings call, Sonos anticipated tariff rates on its products to be 20% for Vietnam and 19% for Malaysia. Although the company is working closely with contract manufacturers and channel partners to share these costs, it has determined that price increases on certain products will be necessary later in 2025. Tariff expenses are expected to be around $5 million in the fiscal fourth quarter, with cash outlays potentially reaching $8 million to $10 million due to inventory build.

What Our Model Says About SONO

Our proven model does not predict an earnings beat for SONO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That is not the case here.

SONO has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

NVIDIA Corporation NVDA currently has an Earnings ESP of +2.08% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVDA is scheduled to report quarterly earnings on Nov. 19. The Zacks Consensus Estimate for NVDA’s to-be-reported quarter’s earnings and revenues is pegged at $1.23 per share and $54.6 billion, respectively. Shares of NVDA have gained 52.3% in the past year.

Advanced Micro Devices, Inc. AMD has an Earnings ESP of +0.18% and a Zacks Rank #3 at present. AMD is scheduled to report quarterly figures on Nov. 4. The Zacks Consensus Estimate for AMD’s to-be-reported quarter’s earnings and revenues is pegged at $1.17 per share and $8.72 billion, respectively. Shares of AMD have gained 84.9% in the past year.

Quantum Corporation QMCO has an Earnings ESP of +1.43% and a Zacks Rank #3 at present. It is scheduled to report quarterly figures on Nov. 5. The Zacks Consensus Estimate for QMCO’s to-be-reported quarter’s earnings and revenues is pegged at $2.97 per share and $10.77 billion, respectively. Shares of QMCO have gained 141.9% in the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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