Sonos Reports Fourth Quarter and Fiscal 2026 Results
Fiscal 2026 marks Sonos’ return to revenue growth, with significant GAAP Net Income improvement and Adjusted EBITDA growth of 39% year over year
Fourth quarter revenue grew double digits, with revenue, gross margin and Adjusted EBITDA above the midpoint of guidance range
SANTA BARBARA, Calif.--(BUSINESS WIRE)--$SONO--Sonos, Inc. (Nasdaq: SONO) today reported Fourth Quarter and Fiscal 2026 results.
“We said Fiscal 2026 would be the year Sonos returned to growth, and we delivered,” said Tom Conrad, Chief Executive Officer of Sonos. “We grew in every region, delivered meaningfully higher profitability, and brought five new products to market. Underneath it all, the system strategy is working - every product improves those our customers already own, and with Sonos 27, that will keep getting stronger every year.”
“Fiscal 2026 demonstrated how much the earning power of Sonos has structurally improved,” said Saori Casey, Chief Financial Officer of Sonos. “We grew revenue 7%, reduced Non-GAAP operating expenses 3% and grew Adjusted EBITDA 39% to $184 million, all while absorbing $56 million of higher memory costs. That’s the foundation we’re building on, and we’re actively managing the levers available to us to optimize our financial performance.”
Fiscal 2026 Financial Highlights (unaudited)*
- Revenue increased 7% year-over-year to $1,547 million
- GAAP gross margin2 of 46.9%, Non-GAAP gross margin1 of 45.5%
- GAAP net income3 increased $151 million year-over-year to $90 million, GAAP diluted earnings per share (EPS)3 increased $1.24 year-over-year to $0.73
- Non-GAAP net income1 increased 92% year-over-year to $150 million, Non-GAAP diluted EPS1 increased 92% year-over-year to $1.23
- Adjusted EBITDA1 increased 39% year-over-year to $184 million
- Returned $130 million to shareholders through repurchase of 8.2 million shares
- Cash flows provided by operating activities increased 6% to $145 million
- Free cash flow3 increased 14% year-over-year to $123 million
Fourth Quarter Fiscal 2026 Financial Highlights (unaudited)*
- Revenue increased 20% year-over-year to $344 million
- GAAP gross margin4 of 46.1%, Non-GAAP gross margin1 of 42.1%
- GAAP net loss5 improved by $33 million year-over-year to ($5) million, GAAP diluted loss per share (EPS)5 improved by $0.27 year-over-year to ($0.04)
- Non-GAAP net income1 increased $12 million year-over-year to $5 million, Non-GAAP diluted EPS1 increased $0.10 year-over-year to $0.04
- Adjusted EBITDA1 was flat year-over-year at $6 million
- Returned $35 million to shareholders through repurchase of 2.2 million shares
New Stock Repurchase Program
- As announced in a separate release today, the company’s Board of Directors has authorized a new common stock repurchase program of up to $150 million
- The new authorization follows the completion of the company’s prior $150 million common stock repurchase program in the fourth quarter of fiscal 2026
Guidance
The company will provide guidance on its Fourth Quarter and Fiscal 2026 earnings call.
Supplemental Earnings Presentation
The company has posted a supplemental earnings presentation accompanying its Fourth Quarter and 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 Fourth Quarter and Fiscal 2026 results on November 10, 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.
| *See “Use of Non-GAAP Measures” and reconciliations to GAAP measures below. | |
| (1) Non-GAAP Gross Margin, Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP EPS exclude the non-recurring benefit from IEEPA tariff refunds received in Q3 and Q4 of Fiscal 2026 | |
| (2) Includes $41.2 million of IEEPA tariff refunds | |
| (3) Includes $41.2 million of IEEPA tariff refunds and $1.4 million of interest earned on IEEPA tariff refunds | |
| (4) Includes $18.0 million of IEEPA tariff refunds | |
| (5) Includes $18.0 million of IEEPA tariff refunds and $0.6 million of interest earned on IEEPA tariff refunds | |
Consolidated Statements of Operations and Comprehensive (Loss) Income | ||||||||
(unaudited, in thousands, except share and per share amounts) | ||||||||
|
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|
|
|
| Three Months Ended |
| Twelve Months Ended | ||||
|
| October 3, 2026 |
| September 27, 2025 |
| October 3, 2026 |
| September 27, 2025 |
Revenue |
| $ 344,441 |
| $ 287,900 |
| $ 1,546,890 |
| $ 1,443,276 |
Cost of revenue |
| 185,716 |
| 162,109 |
| 820,745 |
| 812,746 |
Gross profit |
| 158,725 |
| 125,791 |
| 726,145 |
| 630,530 |
Operating expenses |
|
|
|
|
|
|
|
|
Research and development |
| 66,006 |
| 61,958 |
| 257,777 |
| 279,969 |
Sales and marketing |
| 69,116 |
| 67,762 |
| 256,389 |
| 281,192 |
General and administrative |
| 34,348 |
| 30,480 |
| 122,351 |
| 119,837 |
Total operating expenses |
| 169,470 |
| 160,200 |
| 636,517 |
| 680,998 |
Operating (loss) income |
| (10,745) |
| (34,409) |
| 89,628 |
| (50,468) |
Other income (expense), net |
|
|
|
|
|
|
|
|
Interest income |
| 2,508 |
| 1,528 |
| 7,950 |
| 6,934 |
Interest expense |
| (97) |
| (129) |
| (427) |
| (465) |
Other expense, net |
| (1,634) |
| (1,322) |
| (1,880) |
| (6,498) |
Total other income (expense), net |
| 777 |
| 77 |
| 5,643 |
| (29) |
(Loss) income before (benefit from) provision for income taxes |
| (9,968) |
| (34,332) |
| 95,271 |
| (50,497) |
(Benefit from) provision for income taxes |
| (4,804) |
| 3,526 |
| 5,671 |
| 10,647 |
Net (loss) income |
| $ (5,164) |
| $ (37,858) |
| $ 89,600 |
| $ (61,144) |
|
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(Loss) earnings per share: |
|
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|
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|
Basic |
| $ (0.04) |
| $ (0.31) |
| $ 0.75 |
| $ (0.51) |
Diluted |
| $ (0.04) |
| $ (0.31) |
| $ 0.73 |
| $ (0.51) |
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing (loss) earnings per share: |
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Basic |
| 118,312,116 |
| 120,598,219 |
| 119,475,988 |
| 120,753,102 |
Diluted |
| 118,312,116 |
| 120,598,219 |
| 122,305,404 |
| 120,753,102 |
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|
|
|
|
|
|
Total comprehensive (loss) income |
|
|
|
|
|
|
|
|
Net (loss) income |
| (5,164) |
| (37,858) |
| 89,600 |
| (61,144) |
Change in foreign currency translation adjustment |
| 227 |
| 583 |
| (217) |
| 3,619 |
Net unrealized (loss) gain on marketable securities |
| (52) |
| 43 |
| (123) |
| (98) |
Comprehensive (loss) income |
| $ (4,989) |
| $ (37,232) |
| $ 89,260 |
| $ (57,623) |
Consolidated Balance Sheets | ||||
(unaudited, in thousands, except par values) | ||||
|
| As of | ||
|
| October 3, 2026 |
| September 27, 2025 |
Assets |
|
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Current assets: |
|
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|
|
Cash and cash equivalents |
| $ 178,075 |
| $ 174,668 |
Marketable securities |
| 49,063 |
| 52,858 |
Accounts receivable, net |
| 102,132 |
| 65,847 |
Inventories |
| 272,972 |
| 171,020 |
Prepaids and other current assets |
| 52,139 |
| 39,642 |
Total current assets |
| 654,381 |
| 504,035 |
Property and equipment, net |
| 55,081 |
| 72,277 |
Operating lease right-of-use assets |
| 45,141 |
| 45,297 |
Goodwill |
| 82,854 |
| 82,854 |
Intangible assets, net |
| 61,766 |
| 75,356 |
Deferred tax assets |
| 10,288 |
| 10,509 |
Other noncurrent assets |
| 27,779 |
| 32,950 |
Total assets |
| $ 937,290 |
| $ 823,278 |
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
| $ 255,344 |
| $ 184,109 |
Accrued expenses |
| 87,305 |
| 79,094 |
Accrued compensation |
| 28,534 |
| 21,331 |
Deferred revenue, current |
| 21,916 |
| 21,771 |
Other current liabilities |
| 44,262 |
| 46,107 |
Total current liabilities |
| 437,361 |
| 352,412 |
Operating lease liabilities, noncurrent |
| 51,803 |
| 53,288 |
Deferred revenue, noncurrent |
| 57,417 |
| 59,453 |
Deferred tax liabilities |
| 118 |
| 126 |
Other noncurrent liabilities |
| 3,009 |
| 2,774 |
Total liabilities |
| 549,708 |
| 468,053 |
|
|
|
|
|
Commitments and contingencies |
|
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|
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Stockholders’ equity: |
|
|
|
|
Common stock, $0.001 par value |
| 121 |
| 123 |
Treasury stock |
| (53,091) |
| (37,398) |
Additional paid-in capital |
| 461,567 |
| 502,775 |
Accumulated deficit |
| (22,478) |
| (112,078) |
Accumulated other comprehensive income |
| 1,463 |
| 1,803 |
Total stockholders’ equity |
| 387,582 |
| 355,225 |
Total liabilities and stockholders’ equity |
| $ 937,290 |
| $ 823,278 |
Consolidated Statements of Cash Flows | ||||
(unaudited, dollars in thousands) | ||||
|
| Twelve Months Ended | ||
|
| October 3, 2026 |
| September 27, 2025 |
Cash flows from operating activities |
|
|
|
|
Net income (loss) |
| $ 89,600 |
| $ (61,144) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
Stock-based compensation expense |
| 64,890 |
| 81,564 |
Depreciation and amortization |
| 47,380 |
| 62,321 |
Foreign currency transaction loss (gain) |
| 2,785 |
| 2,352 |
Provision for excess and obsolete inventory |
| 2,052 |
| 8,143 |
Restructuring and other charges |
| 1,088 |
| 11,920 |
Deferred income taxes |
| 112 |
| 8 |
Other |
| 5,406 |
| 3,769 |
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
| (38,999) |
| (21,873) |
Inventories |
| (104,005) |
| 51,729 |
Other assets |
| (11,617) |
| 10,483 |
Accounts payable and accrued expenses |
| 83,036 |
| (14,439) |
Accrued compensation |
| 7,530 |
| 5,232 |
Deferred revenue |
| (1,067) |
| (2,737) |
Other liabilities |
| (3,525) |
| (459) |
Net cash provided by operating activities |
| 144,666 |
| 136,869 |
Cash flows from investing activities |
|
|
|
|
Purchases of marketable securities |
| (57,597) |
| (57,944) |
Purchases of property and equipment |
| (21,766) |
| (28,676) |
Maturities of marketable securities |
| 61,440 |
| 57,100 |
Net cash used in investing activities |
| (17,923) |
| (29,520) |
Cash flows from financing activities |
|
|
|
|
Payments for repurchase of common stock |
| (129,975) |
| (80,984) |
Payments for repurchase of common stock related to shares withheld for tax in connection with vesting of RSUs |
| (26,831) |
| (25,861) |
Payments for debt issuance costs |
| (780) |
| — |
Proceeds from exercise of stock options |
| 34,843 |
| 4,503 |
Net cash used in financing activities |
| (122,743) |
| (102,342) |
Effect of exchange rate changes on cash and cash equivalents |
| (593) |
| (71) |
Net increase in cash and cash equivalents |
| 3,407 |
| 4,936 |
Cash and cash equivalents |
|
|
|
|
Beginning of period |
| 174,668 |
| 169,732 |
End of period |
| $ 178,075 |
| $ 174,668 |
Supplemental disclosure |
|
|
|
|
Cash paid for interest |
| $ 234 |
| $ 279 |
Cash paid for taxes, net of refunds |
| $ 5,608 |
| $ 23,945 |
Cash paid for amounts included in the measurement of lease liabilities, net of tenant improvement reimbursements received |
| $ 10,620 |
| $ 6,629 |
Supplemental disclosure of non-cash investing and financing activities |
|
|
|
|
Purchases of property and equipment in accounts payable and accrued expenses |
| $ 1,376 |
| $ 5,055 |
Right-of-use assets obtained in exchange for new operating lease liabilities |
| $ 5,404 |
| $ 1,491 |
Excise tax on share repurchases, accrued but not paid |
| $ 351 |
| $ 281 |
Reconciliation of GAAP to Non-GAAP Cost of Revenue and Gross Profit | ||||||||
(unaudited, in thousands, except percentages) | ||||||||
|
| Three Months Ended |
| Twelve Months Ended | ||||
|
| October 3, 2026 |
| September 27, 2025 |
| October 3, 2026 |
| September 27, 2025 |
Reconciliation of GAAP cost of revenue |
|
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|
|
|
|
|
GAAP cost of revenue |
| $ 185,716 |
| $ 162,109 |
| $ 820,745 |
| $ 812,746 |
Stock-based compensation expense |
| 1,527 |
| 1,560 |
| 5,236 |
| 6,148 |
Amortization of intangibles |
| 2,608 |
| 2,608 |
| 13,410 |
| 12,360 |
Restructuring and other charges(1)(2) |
| — |
| — |
| 795 |
| 3,420 |
IEEPA tariff refund benefit(3) |
| (18,014) |
| — |
| (41,168) |
| — |
Non-GAAP cost of revenue |
| $ 199,595 |
| $ 157,941 |
| $ 842,472 |
| $ 790,818 |
|
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Reconciliation of GAAP gross profit |
|
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GAAP gross profit |
| $ 158,725 |
| $ 125,791 |
| $ 726,145 |
| $ 630,530 |
Stock-based compensation expense |
| 1,527 |
| 1,560 |
| 5,236 |
| 6,148 |
Amortization of intangibles |
| 2,608 |
| 2,608 |
| 13,410 |
| 12,360 |
Restructuring and other charges(1)(2) |
| — |
| — |
| 795 |
| 3,420 |
IEEPA tariff refund benefit(3) |
| (18,014) |
| — |
| (41,168) |
| — |
Non-GAAP gross profit |
| $ 144,846 |
| $ 129,959 |
| $ 704,418 |
| $ 652,458 |
|
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GAAP gross margin |
| 46.1% |
| 43.7% |
| 46.9% |
| 43.7% |
Non-GAAP gross margin |
| 42.1% |
| 45.1% |
| 45.5% |
| 45.2% |
(1) Restructuring and other charges for fiscal 2026, include employee-related costs resulting from a reorganization of certain functions and organizational changes driven by new leadership, costs related to exiting a contract manufacturing partnership, and exit costs associated with the partial abandonment of office space. | ||||||||
(2) Restructuring and other charges for fiscal 2025 primarily reflect costs associated with our previous cost transformation initiatives. | ||||||||
(3) Tariff refunds relate to non-recurring cash received during the second half of fiscal 2026 following a U.S. Supreme Court ruling invalidating certain IEEPA tariffs, excluding associated interest. | ||||||||
Reconciliation of Selected Non-GAAP Financial Measures | ||||||||
(unaudited, dollars in thousands) | ||||||||
|
| Three Months Ended |
| Twelve Months Ended | ||||
|
| October 3, 2026 |
| September 27, 2025 |
| October 3, 2026 |
| September 27, 2025 |
Research and Development (GAAP) |
| $ 66,006 |
| $ 61,958 |
| $ 257,777 |
| $ 279,969 |
Stock-based compensation |
| 5,911 |
| 7,134 |
| 23,780 |
| 36,414 |
Amortization of intangibles |
| 20 |
| 20 |
| 81 |
| 236 |
Restructuring and other charges (2)(3) |
| - |
| 673 |
| 4,871 |
| 12,555 |
Research and Development (Non-GAAP) |
| $ 60,075 |
| $ 54,131 |
| $ 229,045 |
| $ 230,764 |
|
|
|
|
|
|
|
|
|
Sales and Marketing (GAAP) |
| $ 69,116 |
| $ 67,762 |
| $ 256,389 |
| $ 281,192 |
Stock-based compensation |
| 3,428 |
| 2,705 |
| 11,920 |
| 15,783 |
Restructuring and other charges (2)(3) |
| - |
| 5,949 |
| 1,499 |
| 9,779 |
Sales and Marketing (Non-GAAP) |
| $ 65,688 |
| $ 59,108 |
| $ 242,970 |
| $ 255,630 |
|
|
|
|
|
|
|
|
|
General and Administrative (GAAP) |
| 34,348 |
| 30,480 |
| 122,351 |
| 119,837 |
Stock-based compensation |
| 7,638 |
| 5,377 |
| 23,954 |
| 23,219 |
Legal and transaction related costs(1) |
| 5,785 |
| 2,454 |
| 15,609 |
| 5,384 |
Amortization of intangibles |
| 24 |
| 24 |
| 94 |
| 95 |
Restructuring and other charges (2)(3) |
| - |
| 1,247 |
| 304 |
| 7,736 |
General and Administrative (Non-GAAP) |
| $ 20,901 |
| $ 21,378 |
| $ 82,390 |
| $ 83,403 |
|
|
|
|
|
|
|
|
|
Total Operating Expenses (GAAP) |
| $ 169,470 |
| $ 160,200 |
| $ 636,517 |
| $ 680,998 |
Stock-based compensation |
| 16,977 |
| 15,216 |
| 59,654 |
| 75,416 |
Legal and transaction related costs (1) |
| 5,785 |
| 2,454 |
| 15,609 |
| 5,384 |
Amortization of intangibles |
| 44 |
| 44 |
| 175 |
| 331 |
Restructuring and other charges (2)(3) |
| - |
| 7,869 |
| 6,674 |
| 30,070 |
Operating Expenses (Non-GAAP) |
| $ 146,664 |
| $ 134,617 |
| $ 554,405 |
| $ 569,797 |
|
|
|
|
|
|
|
|
|
Total Operating (Loss) Income (GAAP) |
| $ (10,745) |
| $ (34,409) |
| $ 89,628 |
| $ (50,468) |
Stock-based compensation |
| 18,504 |
| 16,776 |
| 64,890 |
| 81,564 |
Legal and transaction related costs (1) |
| 5,785 |
| 2,454 |
| 15,609 |
| 5,384 |
Amortization of intangibles |
| 2,652 |
| 2,652 |
| 13,585 |
| 12,691 |
Restructuring and other charges (2)(3) |
| - |
| 7,869 |
| 7,469 |
| 33,490 |
IEEPA tariff refund benefit (4) |
| (18,014) |
| - |
| (41,168) |
| - |
Operating (Loss) Income (Non-GAAP) |
| $ (1,818) |
| $ (4,658) |
| $ 150,013 |
| $ 82,661 |
Depreciation |
| 7,804 |
| 11,013 |
| 33,795 |
| 49,630 |
Adjusted EBITDA (Non-GAAP) |
| $ 5,986 |
| $ 6,355 |
| $ 183,808 |
| $ 132,291 |
Total Operating (Loss) Income (GAAP) |
| $ (10,745) |
| $ (34,409) |
| $ 89,628 |
| $ (50,468) |
Stock-based compensation expense |
| 18,504 |
| 16,776 |
| 64,890 |
| 81,564 |
Legal and transaction related costs (1) |
| 5,785 |
| 2,454 |
| 15,609 |
| 5,384 |
Amortization of intangibles |
| 2,652 |
| 2,652 |
| 13,585 |
| 12,691 |
Restructuring and other charges (2)(3) |
| - |
| 7,869 |
| 7,469 |
| 33,490 |
IEEPA tariff refund benefit (4) |
| (18,014) |
| - |
| (41,168) |
| - |
Operating (Loss) Income (Non-GAAP) |
| $ (1,818) |
| $ (4,658) |
| $ 150,013 |
| $ 82,661 |
Interest income |
| 2,508 |
| 1,528 |
| 7,950 |
| 6,934 |
Interest expense |
| (97) |
| (129) |
| (427) |
| (465) |
Interest attributable to IEEPA tariff refunds |
| (640) |
| - |
| (1,418) |
| - |
Pre-tax (Loss) Income (Non-GAAP) |
| $ (47) |
| $ (3,259) |
| $ 156,118 |
| $ 89,130 |
(Benefit from) provision for income taxes |
| (4,804) |
| 3,526 |
| 5,671 |
| 10,647 |
Net income (loss) (Non-GAAP) |
| 4,757 |
| (6,785) |
| 150,446 |
| 78,483 |
Weighted-average shares non-GAAP, diluted |
| 121,005,043 |
| 120,598,219 |
| 122,305,404 |
| 122,944,942 |
Non-GAAP earnings (loss) per share, diluted |
| $ 0.04 |
| $ (0.06) |
| $ 1.23 |
| $ 0.64 |
(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 fiscal 2026, include employee-related costs resulting from a reorganization of certain functions and organizational changes driven by new leadership, costs related to exiting a contract manufacturing partnership, and exit costs associated with the partial abandonment of office space. | ||||||||
(3) Restructuring and other charges for fiscal 2025 primarily reflect costs associated with our previous cost transformation initiatives. | ||||||||
(4) Tariff refunds relate to non-recurring cash received during the period following a U.S. Supreme Court ruling invalidating certain IEEPA tariffs, excluding associated interest. | ||||||||
Reconciliation of Net (Loss) Income to Adjusted EBITDA | ||||||||
(unaudited, dollars in thousands except percentages) | ||||||||
|
| Three Months Ended |
| Twelve Months Ended | ||||
|
| October 3, 2026 |
| September 27, 2025 |
| October 3, 2026 |
| September 27, 2025 |
(In thousands, except percentages) |
|
|
|
|
|
|
|
|
Net (loss) income |
| $ (5,164) |
| $ (37,858) |
| $ 89,600 |
| $ (61,144) |
Add (deduct): |
|
|
|
|
|
|
|
|
Depreciation and amortization |
| 10,456 |
| 13,665 |
| 47,380 |
| 62,321 |
Stock-based compensation expense |
| 18,504 |
| 16,776 |
| 64,890 |
| 81,564 |
Interest income |
| (2,508) |
| (1,528) |
| (7,950) |
| (6,934) |
Interest expense |
| 97 |
| 129 |
| 427 |
| 465 |
Other expense, net |
| 1,634 |
| 1,322 |
| 1,880 |
| 6,498 |
(Benefit from) provision for income taxes |
| (4,804) |
| 3,526 |
| 5,671 |
| 10,647 |
Legal and transaction related costs (1) |
| 5,785 |
| 2,454 |
| 15,609 |
| 5,384 |
IEEPA tariff refund benefit (2) |
| (18,014) |
| - |
| (41,168) |
| - |
Restructuring and other charges (3)(4) |
| — |
| 7,869 |
| 7,469 |
| 33,490 |
Adjusted EBITDA |
| $ 5,986 |
| $ 6,355 |
| $ 183,808 |
| $ 132,291 |
Revenue |
| $ 344,441 |
| $ 287,900 |
| $ 1,546,890 |
| $ 1,443,276 |
Net (loss) income margin |
| (1.5)% |
| (13.1)% |
| 5.8% |
| (4.2)% |
Adjusted EBITDA margin |
| 1.7% |
| 2.2% |
| 11.9% |
| 9.2% |
(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 period following a U.S. Supreme Court ruling invalidating certain IEEPA tariffs, excluding associated interest. | ||||||||
(3) Restructuring and other charges for fiscal 2026, include employee-related costs resulting from a reorganization of certain functions and organizational changes driven by new leadership, costs related to exiting a contract manufacturing partnership, and exit costs associated with the partial abandonment of office space. | ||||||||
(4) Restructuring and other charges for fiscal 2025 primarily reflect costs associated with our previous cost transformation initiatives. | ||||||||
Reconciliation of GAAP Net (Loss) Income to Non-GAAP Net Income (Loss) | ||||||||
(unaudited, in thousands, except share and per share amounts) | ||||||||
|
| Three Months Ended |
| Twelve Months Ended | ||||
|
| October 3, 2026 |
| September 27, 2025 |
| October 3, 2026 |
| September 27, 2025 |
|
|
|
|
|
|
|
|
|
GAAP net (loss) income |
| $ (5,164) |
| $ (37,858) |
| $ 89,600 |
| $ (61,144) |
Stock-based compensation expense |
| 18,504 |
| 16,776 |
| 64,890 |
| 81,564 |
Legal and transaction related costs (1) |
| 5,785 |
| 2,454 |
| 15,609 |
| 5,384 |
Amortization of intangibles |
| 2,652 |
| 2,652 |
| 13,585 |
| 12,691 |
Restructuring and other charges (2)(3) |
| - |
| 7,869 |
| 7,469 |
| 33,490 |
Other expense, net |
| 1,634 |
| 1,322 |
| 1,880 |
| 6,498 |
IEEPA tariff refund benefit, including interest (4) |
| (18,654) |
| - |
| (42,587) |
| - |
Non-GAAP net income (loss) |
| $ 4,757 |
| $ (6,785) |
| $ 150,446 |
| $ 78,483 |
|
|
|
|
|
|
|
|
|
(Loss) earnings per share |
|
|
|
|
|
|
|
|
GAAP (loss) earnings per share, diluted |
| $ (0.04) |
| $ (0.31) |
| $ 0.73 |
| $ (0.51) |
Non-GAAP earnings (loss) per share, diluted |
| $ 0.04 |
| $ (0.06) |
| $ 1.23 |
| $ 0.64 |
|
|
|
|
|
|
|
|
|
Shares used to calculate (loss) earnings per share |
|
|
|
|
|
|
|
|
Weighted-average shares GAAP, diluted |
| 118,312,116 |
| 120,598,219 |
| 122,305,404 |
| 120,753,102 |
Weighted-average shares non-GAAP, diluted |
| 121,005,043 |
| 120,598,219 |
| 122,305,404 |
| 122,944,942 |
(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 fiscal 2026, include employee-related costs resulting from a reorganization of certain functions and organizational changes driven by new leadership, costs related to exiting a contract manufacturing partnership, and exit costs associated with the partial abandonment of office space. | ||||||||
(3) Restructuring and other charges for fiscal 2025 primarily reflect costs associated with our previous cost transformation initiatives. | ||||||||
(4) Tariff refunds relate to non-recurring cash received during the period following a U.S. Supreme Court ruling invalidating certain IEEPA tariffs, including associated interest. | ||||||||
Reconciliation of Cash Flows Provided by Operating Activities to Free Cash Flow | ||||||||
(unaudited, dollars in thousands) | ||||||||
|
| Three Months Ended |
| Twelve Months Ended | ||||
|
| October 3, 2026 |
| September 27, 2025 |
| October 3, 2026 |
| September 27, 2025 |
Cash flows provided by operating activities |
| $ 499 |
| $ 2,921 |
| $ 144,666 |
| $ 136,869 |
Less: Purchases of property and equipment |
| (5,085) |
| (5,258) |
| (21,766) |
| (28,676) |
Free cash flow |
| $ (4,586) |
| $ (2,337) |
| $ 122,900 |
| $ 108,193 |
Revenue by Product Category | ||||||||
(unaudited, dollars in thousands) | ||||||||
|
| Three Months Ended |
| Twelve Months Ended | ||||
|
| October 3, 2026 |
| September 27, 2025 |
| October 3, 2026 |
| September 27, 2025 |
(In thousands) |
|
|
|
|
|
|
|
|
Sonos speakers |
| $ 247,540 |
| $ 206,478 |
| $ 1,202,123 |
| $ 1,121,808 |
Sonos system products |
| 77,049 |
| 65,244 |
| 263,770 |
| 249,237 |
Partner products and other revenue |
| 19,852 |
| 16,178 |
| 80,997 |
| 72,231 |
Total revenue |
| $ 344,441 |
| $ 287,900 |
| $ 1,546,890 |
| $ 1,443,276 |
Revenue by Geographical Region | ||||||||
(unaudited, dollars in thousands) | ||||||||
|
| Three Months Ended |
| Twelve Months Ended | ||||
|
| October 3, 2026 |
| September 27, 2025 |
| October 3, 2026 |
| September 27, 2025 |
Americas |
| $ 224,759 |
| $ 191,900 |
| $ 972,617 |
| $ 922,941 |
Europe, Middle East and Africa |
| 95,856 |
| 77,534 |
| 482,631 |
| 441,177 |
Asia Pacific |
| 23,826 |
| 18,466 |
| 91,642 |
| 79,158 |
Total revenue |
| $ 344,441 |
| $ 287,900 |
| $ 1,546,890 |
| $ 1,443,276 |
Stock-based Compensation | ||||||||
(unaudited, dollars in thousands) | ||||||||
|
| Three Months Ended |
| Twelve Months Ended | ||||
|
| October 3, 2026 |
| September 27, 2025 |
| October 3, 2026 |
| September 27, 2025 |
(In thousands) |
|
|
|
|
|
|
|
|
Cost of revenue |
| $ 1,527 |
| $ 1,560 |
| $ 5,236 |
| $ 6,148 |
Research and development |
| 5,911 |
| 7,244 |
| 23,963 |
| 37,060 |
Sales and marketing |
| 3,428 |
| 2,705 |
| 11,920 |
| 15,932 |
General and administrative |
| 7,638 |
| 5,377 |
| 24,011 |
| 27,110 |
Total stock-based compensation expense |
| $ 18,504 |
| $ 16,886 |
| $ 65,130 |
| $ 86,250 |
Amortization of Intangibles | ||||||||
(unaudited, dollars in thousands) | ||||||||
|
| Three Months Ended |
| Twelve Months Ended | ||||
|
| October 3, 2026 |
| September 27, 2025 |
| October 3, 2026 |
| September 27, 2025 |
Cost of revenue |
| $ 2,608 |
| $ 2,608 |
| $ 13,410 |
| $ 12,360 |
Research and development |
| 20 |
| 20 |
| 81 |
| 236 |
Sales and marketing |
| - |
| - |
| - |
| - |
General and administrative |
| 24 |
| 24 |
| 94 |
| 95 |
Total amortization of intangibles |
| $ 2,652 |
| $ 2,652 |
| $ 13,585 |
| $ 12,691 |
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), 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
Tanya Elm
PR@sonos.com
Read full story here
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