Sonos Q1 Earnings and Revenues Surpass Estimates, Stock Rises

Sonos, Inc. SONO reported first-quarter fiscal 2026 non-GAAP earnings per share of 93 cents, topping the Zacks Consensus Estimate of 81 cents. The company reported 68 cents in the prior-year quarter. On a GAAP basis, the company reported earnings per share of 75 cents compared with 40 cents in the year-ago quarter.

Quarterly revenues decreased marginally by 0.9% year over year to $545.7 million. However, the figure came near the high end of the company’s guidance of $510 million to $560 million. The Zacks Consensus Estimate for the top line was pegged at $538.7 million.

Management highlighted that fiscal 2026 began on a strong note for Sonos as it makes progress toward a return to growth, driven by coordinated execution across product innovation, software, marketing and global expansion. The company announced the launch of Amp Multi, with additional products planned later in the year, as part of its renewed focus on strengthening the Sonos ecosystem through a simpler, more reliable and more scalable platform, while maintaining operational discipline and creating long-term value for customers, partners and the business.

Following the announcement, shares of the company have jumped around 10% in the after-market trading session yesterday. In the past six months, shares have soared 34.7% against the Zacks Audio Video Production industry’s decline of 10.5%.

Sonos’ Revenue Details

Revenues from Sonos speakers were $459.2 million, down 1.7% year over year.

Sonos’ system products’ revenues of $65.1 million increased 7.9%.

Revenues from Partner products and other totaled $21.4 million, down 8.9% year over year.

Region-wise, revenues from the Americas of $328.9 million increased 1.3% year over year. Europe, the Middle East and Africa generated revenues of $189.4 million, down 4.1%. Revenues from the Asia Pacific decreased 4.6% to $27.3 million.

Sonos’ Margin Performance

Non-GAAP gross profit was $259.2 million, up 5.3% on a year-over-year basis. Non-GAAP gross margin expanded 280 basis points (bps) to 47.5%.

Adjusted operating expenses amounted to $136.6 million, down 19.2% year over year. The company’s first-quarter operating expenses were unusually low, reflecting the timing of product launches and related spending.

Sonos, Inc. Price, Consensus and EPS Surprise

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

Non-GAAP research and development (R&D) expenses declined 21%. Non-GAAP general and administrative (G&A) expenses were up 1.8%. Non-GAAP sales and marketing expenses decreased 23%.

Non-GAAP adjusted EBITDA totaled $132.1 million, which came near the upper end of the company’s guidance of adjusted EBITDA between $94 million and $137 million.

Cash Flow & Liquidity

In the fiscal first quarter, Sonos had $163.3 million of cash from operations. Free cash flow was $157.4 million, up from $143.1 million in the same period last year.

As of Dec. 27, cash and cash equivalents were $312.5 million compared with $174.7 million as of Sept. 27, 2025. SONO has no debt.
In the first quarter, the company spent $25 million on share repurchases. Sonos still has $105 million remaining under its current share repurchase authorization.

Sonos’ Guidance

Sonos expects second-quarter revenues to be between $250 million and $280 million, indicating a year-over-year 4% decline to an 8% increase, with a 2% rise at the midpoint.

For the second quarter, GAAP gross margin is expected to be between 44% and 46%, with non-GAAP gross margin approximately 220-bp higher. At the midpoint, this represents a year-over-year increase of 130 bps on a GAAP basis and 10 bps on a non-GAAP basis, translating into gross profit dollar growth of 5% and 2%, respectively.

Second-quarter GAAP operating expenses are forecast at $150 million to $160 million, indicating an 11% year-over-year decline at the midpoint as the company laps prior-year workforce reductions and related restructuring charges. Non-GAAP operating expenses are expected to be roughly $16 million lower than GAAP.

The company’s second-quarter adjusted EBITDA is expected to range from a loss of $18 million to a profit of $10 million.

Sonos’ Zacks Rank

Sonos currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies

Dolby Laboratories, Inc. DLB reported first-quarter fiscal 2026 non-GAAP earnings per share (EPS) of $1.06, surpassing the Zacks Consensus Estimate of 90 cents. It reported $1.14 in the prior-year quarter.

Total revenues were $346.7 million, down from $357 million in the year-ago quarter but surpassed the Zacks Consensus Estimate by 4.2%. The decrease was due to lower revenues in the Licensing segment.

Simulations Plus, Inc. SLP reported first-quarter fiscal 2026 adjusted earnings of 13 cents per share, lagging the Zacks Consensus Estimate by 27.8%. The bottom line also compared unfavorably with the prior-year quarter’s 17 cents.

Quarterly revenues declined 3% year over year to $18.4 million, reflecting lower software revenue amid strong momentum in services. The top line beat the consensus mark by 2%. Management noted that software softness was expected due to reduced clinical operations and development activity, partially offset by increased demand for discovery-focused solutions.

Badger Meter, Inc. BMI reported EPS of $1.14 for fourth-quarter 2025, which missed the Zacks Consensus Estimate by 0.9%. However, the bottom line compared favorably with the year-ago quarter’s EPS of $1.04.

Quarterly net sales were $220.7 million, up 7.6% from $205.2 million in the year-ago quarter, driven by higher utility water sales. The Zacks Consensus Estimate was pegged at $230.8 million.

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