New Elite Feature:   Turn stock screens into a custom charting desk

Learn More

Sonos Reports Third Quarter Fiscal 2026 Results

By Business Wire | July 29, 2026, 4:01 PM

Q3 Revenue, GAAP and Non-GAAP Gross Margin and Adjusted EBITDA near high end of guidance range

SANTA BARBARA, Calif.--(BUSINESS WIRE)--$SONO--Sonos, Inc. (Nasdaq: SONO) today reported Third Quarter Fiscal 2026 results.



"Our third quarter demonstrates the inflection we've been talking about, as revenue growth accelerated and the reinvention of the business continued to take hold," said Tom Conrad, Chief Executive Officer of Sonos. "Over the past 18 months, we've built a leaner, more focused company and a healthier core business centered around our system strategy, and that work is showing up in our results. Revenue grew 9% in Q3, up from 2% in the first half, and we're now growing revenue, expanding gross margin, and growing profit at the same time. We’re carrying this momentum into the fourth quarter as we focus on building durable growth while operating with discipline."

"Q3 was another strong quarter, as revenue and Adjusted EBITDA both landed near the high end of our guidance range. We generated healthy free cash flow and built our cash balance sequentially and year over year, while returning $30 million to our shareholders through share repurchases," said Saori Casey, Chief Financial Officer of Sonos. "Q3 marks our eighth consecutive quarter of disciplined execution against our commitments and structurally improving our business."

Third Quarter Fiscal 2026 Financial Highlights (unaudited)

  • Revenue increased 9% year-over-year to $375 million
  • GAAP gross margin2 of 50.4%, Non-GAAP gross margin1 of 45.5%
  • GAAP net income3 increased by $33 million year-over-year to $30 million, GAAP diluted income per share (EPS)3 increased by $0.28 year-over-year to $0.25
  • Non-GAAP net income1 increased 51% year-over-year to $33 million, Non-GAAP diluted EPS1 increased 52% year-over-year to $0.27
  • Adjusted EBITDA1 increased 24% year-over-year to $44 million
  • Returned $30 million to shareholders through repurchase of 2.0 million shares
  • Free cash flow3 increased by $8 million year-over-year to $40 million

(1) Non-GAAP Gross Margin, Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS are non-GAAP figures and exclude the non-recurring benefit from IEEPA tariff refunds received in Q3 of Fiscal 2026. See “Use of Non-GAAP Measures” and reconciliations to GAAP measures below

(2) Includes $23.2 million of IEEPA tariff refunds

(3) Includes $23.2 million of IEEPA tariff refunds and $0.8 million of interest earned on IEEPA tariff refunds

Guidance

The company will provide guidance on its Third Quarter Fiscal 2026 earnings call.

Supplemental Earnings Presentation

The company has posted a supplemental earnings presentation accompanying its Third Quarter Fiscal 2026 results to the Earnings Reports section of its investor relations website at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports.

Conference Call, Webcast and Transcript

The company will host a webcast of its conference call and Q&A related to its Third Quarter Fiscal 2026 results on July 29, 2026, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Participants may access the live webcast in listen-only mode on the Sonos investor relations website at https://investors.sonos.com/news-and-events/default.aspx.

The conference call may also be accessed by dialing (888) 330-2454 with conference ID 8641747. Participants outside the U.S. can access the call by dialing (240) 789-2714 using the same conference ID.

An archived webcast of the conference call and a transcript of the company’s prepared remarks and Q&A session will also be available at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports following the call.

 

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(unaudited, in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

 

June 27,

2026

 

June 28,

2025

Revenue

 

$

375,260

 

 

$

344,764

 

 

$

1,202,449

 

 

$

1,155,376

 

Cost of revenue

 

 

185,950

 

 

 

195,040

 

 

 

635,030

 

 

 

650,637

 

Gross profit

 

 

189,310

 

 

 

149,724

 

 

 

567,419

 

 

 

504,739

 

Operating expenses

 

 

 

 

 

 

 

 

Research and development

 

 

67,875

 

 

 

59,750

 

 

 

191,771

 

 

 

218,011

 

Sales and marketing

 

 

59,624

 

 

 

62,576

 

 

 

187,273

 

 

 

213,430

 

General and administrative

 

 

30,277

 

 

 

30,327

 

 

 

88,001

 

 

 

89,357

 

Total operating expenses

 

 

157,776

 

 

 

152,653

 

 

 

467,045

 

 

 

520,798

 

Operating income (loss)

 

 

31,534

 

 

 

(2,929

)

 

 

100,374

 

 

 

(16,059

)

Other income (expense), net

 

 

 

 

 

 

 

 

Interest income

 

 

2,182

 

 

 

1,572

 

 

 

5,442

 

 

 

5,406

 

Interest expense

 

 

(110

)

 

 

(117

)

 

 

(330

)

 

 

(336

)

Other income (expense), net

 

 

695

 

 

 

661

 

 

 

(246

)

 

 

(5,176

)

Total other income (expense), net

 

 

2,767

 

 

 

2,116

 

 

 

4,866

 

 

 

(106

)

Income (loss) before provision for income taxes

 

 

34,301

 

 

 

(813

)

 

 

105,240

 

 

 

(16,165

)

Provision for income taxes

 

 

4,448

 

 

 

2,566

 

 

 

10,475

 

 

 

7,121

 

Net income (loss)

 

$

29,853

 

 

$

(3,379

)

 

$

94,765

 

 

$

(23,286

)

 

 

 

 

 

 

 

 

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.25

 

 

$

(0.03

)

 

$

0.79

 

 

$

(0.19

)

Diluted

 

$

0.25

 

 

$

(0.03

)

 

$

0.77

 

 

$

(0.19

)

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing earnings (loss) per share:

 

 

 

 

 

 

 

 

Basic

 

 

118,961,126

 

 

 

120,423,439

 

 

 

119,886,795

 

 

 

120,804,730

 

Diluted

 

 

120,982,504

 

 

 

120,423,439

 

 

 

122,761,707

 

 

 

120,804,730

 

 

 

 

 

 

 

 

 

 

Total comprehensive income (loss)

 

 

 

 

 

 

 

 

Net income (loss)

 

 

29,853

 

 

 

(3,379

)

 

 

94,765

 

 

 

(23,286

)

Change in foreign currency translation adjustment

 

 

(416

)

 

 

3,496

 

 

 

(444

)

 

 

3,036

 

Net unrealized loss on marketable securities

 

 

(29

)

 

 

(23

)

 

 

(71

)

 

 

(140

)

Comprehensive income (loss)

 

$

29,408

 

 

$

94

 

 

$

94,250

 

 

$

(20,390

)

 

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except par values)

 

 

As of

 

 

June 27,

2026

 

September 27,

2025

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

206,894

 

 

$

174,668

 

Marketable securities

 

 

54,132

 

 

 

52,858

 

Accounts receivable, net

 

 

117,190

 

 

 

65,847

 

Inventories

 

 

158,143

 

 

 

171,020

 

Prepaids and other current assets

 

 

55,844

 

 

 

39,642

 

Total current assets

 

 

592,203

 

 

 

504,035

 

Property and equipment, net

 

 

60,141

 

 

 

72,277

 

Operating lease right-of-use assets

 

 

42,790

 

 

 

45,297

 

Goodwill

 

 

82,854

 

 

 

82,854

 

Intangible assets, net

 

 

64,418

 

 

 

75,356

 

Deferred tax assets

 

 

10,043

 

 

 

10,509

 

Other noncurrent assets

 

 

29,672

 

 

 

32,950

 

Total assets

 

$

882,121

 

 

$

823,278

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

179,897

 

 

$

184,109

 

Accrued expenses

 

 

87,889

 

 

 

79,094

 

Accrued compensation

 

 

31,249

 

 

 

21,331

 

Deferred revenue, current

 

 

21,989

 

 

 

21,771

 

Other current liabilities

 

 

45,775

 

 

 

46,107

 

Total current liabilities

 

 

366,799

 

 

 

352,412

 

Operating lease liabilities, noncurrent

 

 

50,192

 

 

 

53,288

 

Deferred revenue, noncurrent

 

 

58,515

 

 

 

59,453

 

Deferred tax liabilities

 

 

113

 

 

 

126

 

Other noncurrent liabilities

 

 

2,970

 

 

 

2,774

 

Total liabilities

 

 

478,589

 

 

 

468,053

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Common stock, $0.001 par value

 

 

121

 

 

 

123

 

Treasury stock

 

 

(46,529

)

 

 

(37,398

)

Additional paid-in capital

 

 

465,965

 

 

 

502,775

 

Accumulated deficit

 

 

(17,313

)

 

 

(112,078

)

Accumulated other comprehensive income

 

 

1,288

 

 

 

1,803

 

Total stockholders’ equity

 

 

403,532

 

 

 

355,225

 

Total liabilities and stockholders’ equity

 

$

882,121

 

 

$

823,278

 

 

Condensed Consolidated Statements of Cash Flows

(unaudited, dollars in thousands)

 

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

Cash flows from operating activities

 

 

 

 

Net income (loss)

 

$

94,765

 

 

$

(23,286

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

Stock-based compensation expense

 

 

46,386

 

 

 

64,789

 

Depreciation and amortization

 

 

36,924

 

 

 

48,657

 

Restructuring and other charges

 

 

1,088

 

 

 

6,323

 

Provision for excess and obsolete inventory

 

 

1,573

 

 

 

9,242

 

Deferred income taxes

 

 

386

 

 

 

942

 

Other

 

 

5,078

 

 

 

2,432

 

Foreign currency transaction loss

 

 

2,122

 

 

 

572

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(53,604

)

 

 

(49,010

)

Inventories

 

 

11,303

 

 

 

106,223

 

Other assets

 

 

(15,882

)

 

 

11,616

 

Accounts payable and accrued expenses

 

 

6,021

 

 

 

(55,341

)

Accrued compensation

 

 

10,330

 

 

 

10,352

 

Deferred revenue

 

 

(157

)

 

 

(1,033

)

Other liabilities

 

 

(2,166

)

 

 

1,470

 

Net cash provided by operating activities

 

 

144,167

 

 

 

133,948

 

Cash flows from investing activities

 

 

 

 

Purchases of marketable securities

 

 

(44,616

)

 

 

(43,949

)

Purchases of property and equipment

 

 

(16,681

)

 

 

(23,418

)

Maturities of marketable securities

 

 

43,340

 

 

 

43,200

 

Net cash used in investing activities

 

 

(17,957

)

 

 

(24,167

)

Cash flows from financing activities

 

 

 

 

Payments for repurchase of common stock

 

 

(95,277

)

 

 

(60,602

)

Payments for repurchase of common stock related to shares withheld for tax in connection with vesting of stock awards

 

 

(20,417

)

 

 

(20,754

)

Proceeds from exercise of stock options

 

 

23,101

 

 

 

2,653

 

Payments for debt issuance costs

 

 

(780

)

 

 

 

Net cash used in financing activities

 

 

(93,373

)

 

 

(78,703

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(611

)

 

 

463

 

Net increase in cash and cash equivalents

 

 

32,226

 

 

 

31,541

 

Cash and cash equivalents

 

 

 

 

Beginning of period

 

 

174,668

 

 

 

169,732

 

End of period

 

$

206,894

 

 

$

201,273

 

Supplemental disclosure

 

 

 

 

Cash paid for interest

 

$

185

 

 

$

197

 

Cash paid for taxes, net of refunds

 

$

4,387

 

 

$

19,065

 

Cash paid for amounts included in the measurement of lease liabilities, net of tenant improvement reimbursements received

 

$

7,088

 

 

$

3,460

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

Purchases of property and equipment in accounts payable and accrued expenses

 

$

3,635

 

 

$

2,155

 

Right-of-use assets obtained in exchange for new operating lease liabilities

 

$

1,829

 

 

$

1,491

 

Excise tax on share repurchases, accrued but not paid

 

$

258

 

 

$

187

 

 

Reconciliation of GAAP to Non-GAAP Cost of Revenue and Gross Profit

(unaudited, in thousands, except percentages)

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

 

June 27,

2026

 

June 28,

2025

Reconciliation of GAAP cost of revenue

 

 

 

 

 

 

 

 

GAAP cost of revenue

 

$

185,950

 

 

$

195,040

 

 

$

635,030

 

 

$

650,637

 

Stock-based compensation expense

 

 

1,257

 

 

 

1,633

 

 

 

3,709

 

 

 

4,588

 

Amortization of intangibles

 

 

3,278

 

 

 

3,278

 

 

 

10,802

 

 

 

9,752

 

Restructuring and other charges

 

 

131

 

 

 

(514

)

 

 

795

 

 

 

3,420

 

IEEPA tariff refund benefit

 

 

(23,154

)

 

 

 

 

 

(23,154

)

 

 

 

Non-GAAP cost of revenue

 

$

204,438

 

 

$

190,643

 

 

$

642,878

 

 

$

632,877

 

 

 

 

 

 

 

 

 

 

Reconciliation of GAAP gross profit

 

 

 

 

 

 

 

 

GAAP gross profit

 

$

189,310

 

 

$

149,724

 

 

$

567,419

 

 

$

504,739

 

Stock-based compensation expense

 

 

1,257

 

 

 

1,633

 

 

 

3,709

 

 

 

4,588

 

Amortization of intangibles

 

 

3,278

 

 

 

3,278

 

 

 

10,802

 

 

 

9,752

 

Restructuring and other charges

 

 

131

 

 

 

(514

)

 

 

795

 

 

 

3,420

 

IEEPA tariff refund benefit

 

 

(23,154

)

 

 

 

 

 

(23,154

)

 

 

 

Non-GAAP gross profit

 

$

170,822

 

 

$

154,121

 

 

$

559,571

 

 

$

522,499

 

 

 

 

 

 

 

 

 

 

GAAP gross margin

 

 

50.4

%

 

 

43.4

%

 

 

47.2

%

 

 

43.7

%

Non-GAAP gross margin

 

 

45.5

%

 

 

44.7

%

 

 

46.5

%

 

 

45.2

%

 

Reconciliation of Selected Non-GAAP Financial Measures

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

 

June 27,

2026

 

June 28,

2025

Research and Development (GAAP)

 

$

67,875

 

 

$

59,750

 

 

$

191,771

 

 

$

218,011

 

Stock-based compensation

 

 

5,909

 

 

 

7,944

 

 

 

17,869

 

 

 

29,280

 

Amortization of intangibles

 

 

20

 

 

 

20

 

 

 

61

 

 

 

216

 

Restructuring and other charges (2)(3)

 

 

4,014

 

 

 

(824

)

 

 

4,871

 

 

 

11,882

 

Research and Development (Non-GAAP)

 

$

57,932

 

 

$

52,610

 

 

$

168,970

 

 

$

176,633

 

 

 

 

 

 

 

 

 

 

Sales and Marketing (GAAP)

 

$

59,624

 

 

$

62,576

 

 

$

187,273

 

 

$

213,430

 

Stock-based compensation

 

 

2,884

 

 

 

3,466

 

 

 

8,492

 

 

 

13,078

 

Amortization of intangibles

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Restructuring and other charges (2)(3)

 

 

46

 

 

 

1,038

 

 

 

1,499

 

 

 

3,831

 

Sales and Marketing (Non-GAAP)

 

$

56,694

 

 

$

58,072

 

 

$

177,282

 

 

$

196,521

 

 

 

 

 

 

 

 

 

 

General and Administrative (GAAP)

 

 

30,277

 

 

 

30,327

 

 

 

88,001

 

 

 

89,357

 

Stock-based compensation

 

 

6,280

 

 

 

6,309

 

 

 

16,316

 

 

 

17,843

 

Legal and transaction related costs

 

 

3,789

 

 

 

1,306

 

 

 

9,823

 

 

 

2,928

 

Amortization of intangibles

 

 

24

 

 

 

24

 

 

 

70

 

 

 

71

 

Restructuring and other charges (2)(3)

 

 

214

 

 

 

2,281

 

 

 

304

 

 

 

6,488

 

General and Administrative (Non-GAAP)

 

$

19,970

 

 

$

20,407

 

 

$

61,488

 

 

$

62,027

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses (GAAP)

 

$

157,776

 

 

$

152,653

 

 

$

467,045

 

 

$

520,798

 

Stock-based compensation

 

 

15,073

 

 

 

17,719

 

 

 

42,677

 

 

 

60,201

 

Legal and transaction related costs (1)

 

 

3,789

 

 

 

1,306

 

 

 

9,823

 

 

 

2,928

 

Amortization of intangibles

 

 

44

 

 

 

44

 

 

 

131

 

 

 

287

 

Restructuring and other charges (2)(3)

 

 

4,274

 

 

 

2,495

 

 

 

6,674

 

 

 

22,201

 

Operating Expenses (Non-GAAP)

 

$

134,596

 

 

$

131,089

 

 

$

407,740

 

 

$

435,181

 

 

 

 

 

 

 

 

 

 

Total Operating Income (Loss) (GAAP)

 

$

31,534

 

 

$

(2,929

)

 

$

100,374

 

 

$

(16,059

)

Stock-based compensation

 

 

16,330

 

 

 

19,352

 

 

 

46,386

 

 

 

64,789

 

Legal and transaction related costs (1)

 

 

3,789

 

 

 

1,306

 

 

 

9,823

 

 

 

2,928

 

Amortization of intangibles

 

 

3,322

 

 

 

3,322

 

 

 

10,933

 

 

 

10,039

 

Restructuring and other charges (2)(3)

 

 

4,405

 

 

 

1,981

 

 

 

7,469

 

 

 

25,621

 

IEEPA tariff refund benefit (4)

 

 

(23,154

)

 

 

-

 

 

 

(23,154

)

 

 

-

 

Operating Income (Non-GAAP)

 

$

36,226

 

 

$

23,032

 

 

$

151,831

 

 

$

87,318

 

Depreciation

 

 

7,740

 

 

 

12,557

 

 

 

25,991

 

 

 

38,618

 

Adjusted EBITDA (Non-GAAP)

 

$

43,966

 

 

$

35,589

 

 

$

177,822

 

 

$

125,936

 

 

 

 

 

 

 

 

 

 

Total Operating Income (Loss) (GAAP)

 

$

31,534

 

 

$

(2,929

)

 

$

100,374

 

 

$

(16,059

)

Stock-based compensation expense

 

 

16,330

 

 

 

19,352

 

 

 

46,386

 

 

 

64,789

 

Legal and transaction related costs (1)

 

 

3,789

 

 

 

1,306

 

 

 

9,823

 

 

 

2,928

 

Amortization of intangibles

 

 

3,322

 

 

 

3,322

 

 

 

10,933

 

 

 

10,039

 

Restructuring and other charges (2)(3)

 

 

4,405

 

 

 

1,981

 

 

 

7,469

 

 

 

25,621

 

IEEPA tariff refund benefit (4)

 

 

(23,154

)

 

 

-

 

 

 

(23,154

)

 

 

-

 

Operating Income (Non-GAAP)

 

$

36,226

 

 

$

23,032

 

 

$

151,831

 

 

$

87,318

 

Interest income

 

 

2,182

 

 

 

1,572

 

 

 

5,442

 

 

 

5,406

 

Interest expense

 

 

(110

)

 

 

(117

)

 

 

(330

)

 

 

(336

)

Interest attributable to IEEPA tariff refunds

 

 

(778

)

 

 

-

 

 

 

(778

)

 

 

-

 

Pre-tax Income (Non-GAAP)

 

$

37,520

 

 

$

24,487

 

 

$

156,165

 

 

$

92,388

 

Provision for income taxes

 

 

4,448

 

 

 

2,566

 

 

 

10,475

 

 

 

7,121

 

Net income (Non-GAAP)

 

 

33,072

 

 

 

21,921

 

 

 

145,690

 

 

 

85,267

 

Weighted-average shares non-GAAP, diluted

 

 

120,982,504

 

 

 

121,510,933

 

 

 

122,761,707

 

 

 

123,003,812

 

Non-GAAP earnings per share, diluted

 

$

0.27

 

 

$

0.18

 

 

$

1.19

 

 

$

0.69

 

(1) Legal and transaction-related costs consist of expenses related to our intellectual property ("IP") litigation against Alphabet and Google, which we do not consider representative of our underlying operating performance.

(2) Restructuring and other charges for the three and nine months ended June 27, 2026, include employee-related costs resulting from a reorganization of certain corporate functions and organizational changes driven by new leadership. Additionally, the charges include costs related to exiting a contract manufacturing partnership to consolidate and improve supply chain efficiency and exit costs associated with the partial abandonment of office space.

(3) Restructuring and other charges for the three and nine months ended June 28, 2025 primarily reflect costs associated with our cost transformation initiative including the 2025 restructuring plan and rationalization of our product roadmap, as well as non-recurring CEO transition costs related to modifications to equity awards.

(4) Tariff refunds relate to non-recurring cash received during the quarter following a U.S. Supreme Court ruling invalidating certain IEEPA tariffs.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(unaudited, dollars in thousands except percentages)

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

 

June 27,

2026

 

June 28,

2025

(In thousands, except percentages)

 

 

 

 

 

 

 

 

Net income (loss)

 

$

29,853

 

 

$

(3,379

)

 

$

94,765

 

 

$

(23,286

)

Add (deduct):

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

11,062

 

 

 

15,879

 

 

 

36,924

 

 

 

48,657

 

Stock-based compensation expense

 

 

16,330

 

 

 

19,352

 

 

 

46,386

 

 

 

64,789

 

Interest income

 

 

(2,182

)

 

 

(1,572

)

 

 

(5,442

)

 

 

(5,406

)

Interest expense

 

 

110

 

 

 

117

 

 

 

330

 

 

 

336

 

Other (income) expense, net

 

 

(695

)

 

 

(661

)

 

 

246

 

 

 

5,176

 

Provision for income taxes

 

 

4,448

 

 

 

2,566

 

 

 

10,475

 

 

 

7,121

 

Legal and transaction related costs (1)

 

 

3,789

 

 

 

1,306

 

 

 

9,823

 

 

 

2,928

 

IEEPA tariff refund benefit (2)

 

 

(23,154

)

 

 

-

 

 

 

(23,154

)

 

 

-

 

Restructuring and other charges (3)(4)

 

 

4,405

 

 

 

1,981

 

 

 

7,469

 

 

 

25,621

 

Adjusted EBITDA

 

$

43,966

 

 

$

35,589

 

 

$

177,822

 

 

$

125,936

 

Revenue

 

$

375,260

 

 

$

344,764

 

 

$

1,202,449

 

 

$

1,155,376

 

Net income (loss) margin

 

 

8.0

%

 

 

(1.0

)%

 

 

7.9

%

 

 

(2.0

)%

Adjusted EBITDA margin

 

 

11.7

%

 

 

10.3

%

 

 

14.8

%

 

 

10.9

%

(1) Legal and transaction-related costs consist of expenses related to our IP litigation against Alphabet and Google, which we do not consider representative of our underlying operating performance.

(2) Tariff refunds relate to non-recurring cash received during the quarter following a U.S. Supreme Court ruling invalidating certain IEEPA tariffs.

(3) Restructuring and other charges for the three and nine months ended June 27, 2026, include employee-related costs resulting from a reorganization of certain corporate functions and organizational changes driven by new leadership. Additionally, the charges include costs related to exiting a contract manufacturing partnership to consolidate and improve supply chain efficiency and exit costs associated with the partial abandonment of office space.

(4) Restructuring and other charges for the three and nine months ended June 28, 2025 primarily reflect costs associated with our cost transformation initiative including the 2025 restructuring plan and rationalization of our product roadmap, as well as non-recurring CEO transition costs related to modifications to equity awards.

Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income

(unaudited, in thousands, except share and per share amounts)

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

 

June 27,

2026

 

June 28,

2025

 

 

 

 

 

 

 

 

 

GAAP net income (loss)

 

$

29,853

 

 

$

(3,379

)

 

$

94,765

 

 

$

(23,286

)

Stock-based compensation expense

 

 

16,330

 

 

 

19,352

 

 

 

46,386

 

 

 

64,789

 

Legal and transaction related costs (1)

 

 

3,789

 

 

 

1,306

 

 

 

9,823

 

 

 

2,928

 

Amortization of intangibles

 

 

3,322

 

 

 

3,322

 

 

 

10,933

 

 

 

10,039

 

Restructuring and other charges (2)(3)

 

 

4,405

 

 

 

1,981

 

 

 

7,469

 

 

 

25,621

 

Other (income) expense, net

 

 

(695

)

 

 

(661

)

 

 

246

 

 

 

5,176

 

IEEPA tariff refund benefit, including interest (4)

 

 

(23,932

)

 

 

-

 

 

 

(23,932

)

 

 

-

 

Non-GAAP net income

 

$

33,072

 

 

$

21,921

 

 

$

145,690

 

 

$

85,267

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

 

 

 

GAAP earnings (loss) per share, diluted

 

$

0.25

 

 

$

(0.03

)

 

$

0.77

 

 

$

(0.19

)

Non-GAAP earnings per share, diluted

 

$

0.27

 

 

$

0.18

 

 

$

1.19

 

 

$

0.69

 

 

 

 

 

 

 

 

 

 

Shares used to calculate earnings (loss) per share

 

 

 

 

 

 

 

 

Weighted-average shares GAAP, diluted

 

 

120,982,504

 

 

 

120,423,439

 

 

 

122,761,707

 

 

 

120,804,730

 

Weighted-average shares non-GAAP, diluted

 

 

120,982,504

 

 

 

121,510,933

 

 

 

122,761,707

 

 

 

123,003,812

 

(1) Legal and transaction-related costs consist of expenses related to our intellectual property ("IP") litigation against Alphabet and Google, which we do not consider representative of our underlying operating performance.

(2) Restructuring and other charges for the three and nine months ended June 27, 2026, include employee-related costs resulting from a reorganization of certain corporate functions and organizational changes driven by new leadership. Additionally, the charges include costs related to exiting a contract manufacturing partnership to consolidate and improve supply chain efficiency and exit costs associated with the partial abandonment of office space.

(3) Restructuring and other charges for the three and nine months ended June 28, 2025 primarily reflect costs associated with our cost transformation initiative including the 2025 restructuring plan and rationalization of our product roadmap, as well as non-recurring CEO transition costs related to modifications to equity awards.

(4) Tariff refunds relate to non-recurring cash received during the quarter following a U.S. Supreme Court ruling invalidating certain IEEPA tariffs.

Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

 

June 27,

2026

 

June 28,

2025

Cash flows provided by operating activities

 

$

46,234

 

 

$

37,441

 

 

$

144,167

 

 

$

133,948

 

Less: Purchases of property and equipment

 

 

(5,947

)

 

 

(4,756

)

 

 

(16,681

)

 

 

(23,418

)

Free cash flow

 

$

40,287

 

 

$

32,685

 

 

$

127,486

 

 

$

110,530

 

 

Revenue by Product Category

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

 

June 27,

2026

 

June 28,

2025

(In thousands)

 

 

 

 

 

 

 

 

Sonos speakers

 

$

285,325

 

$

253,669

 

$

954,583

 

$

915,330

Sonos system products

 

 

69,252

 

 

73,179

 

 

186,721

 

 

183,993

Partner products and other revenue

 

 

20,683

 

 

17,916

 

 

61,145

 

 

56,053

Total revenue

 

$

375,260

 

$

344,764

 

$

1,202,449

 

$

1,155,376

 

Revenue by Geographical Region

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

 

June 27,

2026

 

June 28,

2025

Americas

 

$

238,373

 

$

229,656

 

$

747,858

 

$

731,041

Europe, Middle East and Africa

 

 

114,173

 

 

97,245

 

 

386,775

 

 

363,642

Asia Pacific

 

 

22,714

 

 

17,863

 

 

67,816

 

 

60,693

Total revenue

 

$

375,260

 

$

344,764

 

$

1,202,449

 

$

1,155,376

 

Stock-based Compensation

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

 

June 27,

2026

 

June 28,

2025

(In thousands)

 

 

 

 

 

 

 

 

Cost of revenue

 

$

1,257

 

$

1,633

 

$

3,709

 

$

4,588

Research and development

 

 

6,092

 

 

7,944

 

 

18,052

 

 

29,816

Sales and marketing

 

 

2,884

 

 

3,568

 

 

8,492

 

 

13,227

General and administrative

 

 

6,337

 

 

7,639

 

 

16,373

 

 

21,733

Total stock-based compensation expense

 

$

16,570

 

$

20,784

 

$

46,626

 

$

69,364

 

Amortization of Intangibles

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

Nine Months Ended

 

 

June 27,

2026

 

June 28,

2025

 

June 27,

2026

 

June 28,

2025

Cost of revenue

 

$

3,278

 

$

3,278

 

$

10,802

 

$

9,752

Research and development

 

 

20

 

 

20

 

 

61

 

 

216

Sales and marketing

 

 

-

 

 

-

 

 

-

 

 

-

General and administrative

 

 

24

 

 

24

 

 

70

 

 

71

Total amortization of intangibles

 

$

3,322

 

$

3,322

 

$

10,933

 

$

10,039

 

Use of Non-GAAP Measures

We have provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles (“U.S. GAAP”), including Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP operating income (loss), non-GAAP pre-tax income (loss), free cash flow, non-GAAP gross margin, non-GAAP net income (loss), non-GAAP cost of revenue, non-GAAP gross profit and non-GAAP diluted earnings (loss) per share.


Contacts

Investor Contact
James Baglanis
IR@sonos.com

Press Contact
PR@sonos.com


Read full story here

Mentioned In This Article

Latest News