Track market-moving stories before they get noisy

Sonos (Nasdaq: SONO) today began rolling out Sonos 27, the next generation of its audio operating system. The update gives listeners AI control through outside assistants and agents, portable speakers that automatically become home theater surrounds, and a more intuitive app. It also introduces headphone linking, an Early Access feature that lets headphones connect directly into the Sonos system for the first time, starting with Sonos Ace Ultra.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260908467215/en/

Sonos 27app's redesigned navigation, shown with lock screen controls, saved Presets, and a new virtual volume dial.

"Most of the tech industry ships new capability by shipping new hardware, but we built Sonos differently," said Tom Conrad, CEO of Sonos. "Our system grows more capable and smarter over time, so whichever Sonos product you already have at home can do more today than it did last year. That's exactly what's rolling out with Sonos 27."

Control your Sonos system with AI

Sonos is expanding its open platform to give listeners the choice to control their system with whichever AI they already use. Available starting today in Early Access, Sonos 27mcp lets you connect Sonos to any outside AI, including ChatGPT and Claude. Seamlessly adjust your music while using their platforms to stay in the moment, instead of interrupting it. Sonos 27mcp is built on the Model Context Protocol, the open standard for connecting AI to outside applications, and hosted at mcp.ws.sonos.com/mcp.

“We’re excited to see Sonos join the MCP ecosystem and build an integration for Claude,” said Den Delimarsky, Lead Maintainer of MCP and Member of Technical Staff at Anthropic. “This integration will enable Sonos customers to do more with their devices directly from Claude, such as controlling sound without breaking their flow.”

Coming later this Fall, Sonos 27voice is the system’s new AI-powered assistant, made to understand music, mood and control. Built and fine-tuned in-house, Sonos 27voice is trained for the way people actually ask for music: referential and feeling-first. Talk to it like a friend who knows what song you mean, even when you can’t remember the title or artist. You can also use it to curate whatever vibe the moment calls for: morning routine, dinner party, or winding down before bed. Just describe the mood you want and Sonos 27voice can build the right soundtrack for you.

Sonos also previewed where its open platform goes next in 2027 with Sonos Custom Agents, which will let people create their own agents through the system, each with its own model, persona and voice.

“We don't believe one assistant should own the home. One assistant can't be great at everything,” said Nick Millington, Chief Innovation Officer. “Sonos 27voice is great at music and control, and our open platform lets you bring in whatever's great at the rest.”

Sound that bends to your needs

Sonos 27 brings two new features to Sonos FabricTM, the existing system intelligence that lets Sonos products sense and adapt to each other.

Portable surrounds mean your Move 2s or Sonos Plays never have to choose between being your backyard speaker or part of your home theater. Sonos Positioning Technology lets them sense their distance from each other and a nearby soundbar using brief high-frequency audio signals, then switch roles automatically. Set two of the same portable speakers near a compatible soundbar (Arc Ultra, Arc, Beam Ultra, or Beam Gen 2) and they'll do the rest. Once the movie's done, pick them back up and they're portable speakers again.

Headphone linking connects your Sonos Ace Ultra directly into your Sonos system, so you don't need to keep your phone nearby to listen. With one tap, you can push and pull sound between out loud and personal listening, sending it to the closest speaker or straight back into your ears. Headphone linking runs on Sonos Headphone Engine 2, the platform built into Sonos Ace Ultra with redesigned WiFi antennas and secure credential storage, letting the headphones move through the home instead of relying solely on Bluetooth.

A more intuitive Sonos 27app

Sonos 27app brings a new way of navigating, organized into Home, System and Search across the bottom, with native swipe gestures and the ability to pin favorite rooms to the top. It was shaped and tested with the Sonos community. iPhone owners can already control playback from the lock screen and Dynamic Island, with today's update adding Siri and Shortcuts support, as well as a refreshed iPad layout. Sonos 27app also debuts a new virtual volume knob, which lets you twist two fingers on the screen to adjust volume like turning a dial. Presets, which let you save a set of speakers, content, and volume and return to it with one tap, arrives later this fall alongside new system health views.

A system for the way a home feels

Sonos is an audio operating system that helps you create the sound experience for your home. Built on an open platform, it brings together every way people want to listen, so you can play anything, any way you want. Every speaker is built to work better together. Add one and the rest get smarter, filling more of the home with sound that's tuned to the room it's actually playing in. Continuous platform enhancements and products designed to work across generations mean the system gets more capable over time.

Availability

Sonos 27 becomes available today as a free software update to all Sonos S2 products, though feature availability varies by product. The update includes new Sonos 27app navigation and portable surrounds, both available today, along with Sonos 27mcp in Early Access. Headphone linking arrives alongside Sonos Ace Ultra on September 29 as an Early Access feature, Sonos 27voice arrives as an Early Access feature later this Fall, and Sonos Custom Agents is targeted for 2027. Sonos also recently announced two flagship products, Sonos Beam Ultra and Sonos Ace Ultra, available now for pre-order at sonos.com and select retail partners, with general availability starting September 29, 2026. For more information, visit www.sonos.com.

About Sonos

Sonos (Nasdaq: SONO) is a leading audio company dedicated to elevating life through sound. Sonos has built a connected system that brings together all the sounds people love, from music and movies to stories and conversations. Its portfolio of home theater speakers, components, plug-in and portable speakers, and headphones grows more powerful with every room and device added. Trusted by more than 17 million households in over 60 countries, Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.

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Sonos (Nasdaq: SONO) today introduced Sonos Beam UltraandSonos Ace Ultra, expanding its home theater and personal listening portfolios alongside the updated release of its audio operating system, Sonos 27. Beam Ultra keeps Beam's compact form while unlocking true 7.1.2 Dolby Atmos. Sonos Ace Ultra arrives with an all-new driver, next-generation Adaptive ANC, and a direct connection to the Sonos system.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260901874179/en/

Sonos Ace Ultra and Beam Ultra bring the system and new Sonos 27 features into everyday moments at home.

"Beam Ultra and Sonos Ace Ultra are physical manifestations of what we mean when we say 'sounds like Sonos' – they combine next-gen innovation, acoustic design, and audio engineering into something only decades of learning in real homes can create," said Tom Conrad, CEO of Sonos. "But the real magic happens when they take advantage of the system around them to fit your mood, whether that's the awe of movie night, or the joy of carrying its soundtrack into your headphones the next morning."

Beam Ultra is Sonos' new mid-size soundbar, built with nine custom drivers, including two dedicated up-firing drivers that deliver true 7.1.2 Dolby Atmos and warmer bass. A redesigned center channel brings clearer dialogue, with four levels of AI Speech Enhancement for when you want more clarity and Night Sound for late nights. Beam Ultra anchors a home theater setup that grows and adapts with you, whether that's adding a Sub for deeper bass or rear surrounds - which now can include compatible Sonos portable speakers - when the moment calls for it.

“A great mix means the listener feels everything without noticing how,” said Chris Jenkins, EVP Digital Studios, Universal Music Group. “That's exactly what Beam Ultra delivers - sound that pulls you into the scene instead of reminding you you're listening to a speaker.”

Sonos Ace Ultra is Sonos' newest premium over-ear headphone, built with a Sonos-designed 40mm driver, Adaptive ANC powered by ten microphones, and up to 35 hours of battery life with ANC on. It's also the first headphone built on Headphone Engine 2, new hardware that lets you link the headphone directly into the Sonos system, available in Early Access. One press pushes whatever's playing on your Sonos system to your headphones, another press pulls it back, without needing a phone in range.

Built for the Sonos system

Beam Ultra and Sonos Ace Ultra give listeners two new ways to create the sound experience for their home using Sonos 27. Like all Sonos speakers, Beam Ultra and Sonos Ace Ultra were tuned with input from the Sonos Soundboard, a group of leaders across music, film, and more, to deliver sound that stays true to the artist's intent.

Your music ecosystem: 100+ streaming services make Sonos the world's most complete streaming music system.Better together: Beam Ultra groups and bonds with other Sonos speakers for multi-room listening and home theater and Sonos Ace Ultra taps into that same system through headphone linking.Tuned to your home: Trueplay tunes Beam Ultra to any room, and TrueCinema does the same for Sonos Ace Ultra when it's pulling sound from a compatible soundbar.Controlled your way: Beam Ultra connects over WiFi, Bluetooth, and HDMI eARC, and Sonos Ace Ultra adds USB-C and 3.5mm, so whatever you're listening to has a way in.A system for the way a home feels

Sonos is an audio operating system that helps you create the sound experience for your home. Built on an open platform, it brings together every way people want to listen, so you can play anything, any way you want. Every speaker is built to work better together. Add one and the rest get smarter, filling more of the home with sound that's tuned to the room it's actually playing in. Continuous platform enhancements and products designed to work across generations mean the system gets more capable over time.

Beam Ultra and Sonos Ace Ultra will be available for pre-order starting September 1, 2026 at sonos.com and select retail partners, priced at $699 and $449 respectively, with general availability on September 29, 2026. For more information, visit sonos.com, and follow along on @sonos.

About Sonos

Sonos (Nasdaq: SONO) is a leading audio company dedicated to elevating life through sound. Sonos has built a connected system that brings together all the sounds people love, from music and movies to stories and conversations. Its portfolio of home theater speakers, components, plug-in and portable speakers, and headphones grows more powerful with every room and device added. Trusted by more than 17 million households in over 60 countries, Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.

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Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

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SANTA BARBARA, Calif.--(BUSINESS WIRE)--Sonos introduces Beam Ultra and Sonos Ace Ultra, new soundbar and headphone, alongside its Sonos 27 audio operating system update.

A month has gone by since the last earnings report for Sonos (SONO - Free Report) . Shares have added about 4.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Sonos due for a pullback? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent catalysts for Sonos, Inc. before we dive into how investors and analysts have reacted as of late.

Sonos Q3 Earnings Beat

Sonos reported third-quarter fiscal 2026 non-GAAP earnings of 27 cents per share, which soared 52% year over year and topped the Zacks Consensus Estimate of 24 cents. The 12.5% surprise reflected higher sales and disciplined spending despite rising memory costs.

Revenues increased 9% to $375 million, beating the $367 million consensus by 2.3%. Speaker demand and international expansion supported growth. Sonos’ installed base exceeded 53 million connected devices across more than 17 million homes.

Segment Details

Revenues from Sonos speakers rose 12.5% year over year to $285.3 million and remained the company’s largest product category. The quarter included the first full period of availability for Sonos Play and Era 100 SL, both of which contributed meaningfully to revenue growth.

Sonos system products generated $69.3 million, down 5.4%. Partner products and other revenues increased 15.4% to $20.7 million. Amp Multi is scheduled to ship on Aug. 25, extending the company’s offering for professional installers and larger multi-zone projects.

Overseas Markets Outpace the Americas

Americas revenues advanced 3.8% to $238.4 million. Europe, the Middle East and Africa revenues climbed 17.4% to $114.2 million, while Asia-Pacific sales increased 27.2% to $22.7 million.

Foreign exchange added about one percentage point to reported growth. On a constant-currency basis, total revenues rose 7%, accelerating three percentage points from the second quarter.

Margin Gains Offset Memory Inflation

Non-GAAP gross profit increased 10.8% to $170.8 million. Non-GAAP gross margin expanded 80 basis points (bps) to 45.5%, even as higher memory costs created a $14 million year-over-year burden and reduced the margin by roughly 380 bps.

GAAP gross margin was 50.4%, including a $23.2 million benefit from refunds of previously paid tariffs. Excluding that non-recurring benefit, GAAP gross margin was 44.3%, up 90 bps year over year.

GAAP operating expenses increased 3.4% to $157.8 million, mainly due to employee compensation, litigation spending and restructuring charges. Non-GAAP operating expenses rose 2.7% to $134.6 million and remained below the levels recorded in the first two quarters of fiscal 2026.

Adjusted EBITDA grew 23.5% to $44 million, with the margin improving to 11.7% from 10.3%. Non-GAAP operating income reached $36.2 million, up 57.3%, as gross-profit growth outpaced the increase in adjusted expenses.

Cash provided by operating activities increased 23.5% to $46.2 million. Free cash flow rose 23.3% to $40.3 million, while cash and marketable securities totaled $261 million at quarter-end.

Sonos repurchased 2 million shares for $30 million, leaving $35 million under its authorization. Inventories were $158 million, up 37% year over year due to higher memory costs, new product launches and capitalized tariffs.

Q4 Guidance

For the fourth quarter of fiscal 2026, SONO expects revenues of $325 million to $355 million, representing 13% to 23% growth. The 14-week quarter includes an extra week expected to add about $24 million in sales and eight percentage points to growth. Excluding that benefit, growth is projected at 4% to 15%.

GAAP gross margin is forecast between 39% and 41%, with non-GAAP gross margin about 120 bps higher. Management expects memory inflation to reduce gross profit by $35 million year over year. Adjusted EBITDA is projected between a loss of $11 million and a profit of $18 million.

For fiscal 2026, Sonos expects revenue growth of 6% to 8%, or 4% to 6% excluding the extra week. Adjusted EBITDA is projected at $181 million, up 37%, with an 11.7% margin. Management expects memory-mitigation actions to phase in through fiscal 2027.

How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 23.81% due to these changes.

VGM ScoresCurrently, Sonos has a great Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, Sonos has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Key Takeaways Sonos' fiscal Q3 revenues rose 9% to $375 million, accelerating from 2% growth in the first half.Higher memory costs are expected to cut SONO's fourth-quarter gross profit by about $35 million.Sonos ended fiscal Q3 with $261 million in cash and securities as inventory rose 37% year over year. Sonos, Inc. (SONO - Free Report) is returning to revenue growth as new products and international expansion lift demand. Third-quarter fiscal 2026 results showed a sharper top-line recovery and better earnings momentum.

The trade-off is increasingly visible in margins. Higher memory costs are set to intensify in the fourth quarter and remain a drag into fiscal 2027, leaving investors to weigh improving execution against a demanding operating backdrop.

Sonos Revenue Growth Is ReacceleratingThird-quarter fiscal 2026 revenues rose 9% year over year to $375 million after 2% growth in the first half. Sonos Play and Era 100 SL contributed meaningfully in their first full quarter of availability.

For fiscal 2026, management expects revenue growth of 6% to 8%, or 4% to 6% excluding the extra week. Amp Multi, scheduled to ship Aug. 25, adds another product aimed at professional installers and larger multi-zone projects.

Image Source: Zacks Investment Research

SONO Valuation Looks Reasonable but Not CheapSONO trades at 1.11X forward 12-month sales compared with 1.69X for the Zacks sub-industry and 2.29X for the Zacks Consumer Discretionary sector. The stock is also exactly at its three-year median multiple of 1.11X.

A forward price-to-earnings ratio of 12.36 and price/earnings-to-growth ratio of 0.43 add context. Still, the shares are not clearly inexpensive relative to their own recent history.

Sonos Faces a Sharp Memory-Cost Margin SqueezeHigher memory costs reduced third-quarter gross margin by roughly 380 basis points and adjusted EBITDA by $14 million year over year. Sonos still generated adjusted EBITDA of $44 million, up 24%, but the cost pressure is accelerating.

Management expects higher memory prices to reduce fourth-quarter gross profit by about $35 million, equal to roughly 1,000 basis points of gross-margin pressure. For fiscal 2027, the lower end of the 39% to 41% fourth-quarter GAAP gross-margin range is a reasonable starting point as mitigation actions phase in.

SONO Still Has Balance Sheet Room to InvestSonos ended the third quarter with $206.9 million in cash and $54.1 million of marketable securities, or $261 million combined. Free cash flow reached $127.5 million through the first nine months of fiscal 2026.

That liquidity supports product development and expansion while preserving room for capital returns. Sonos repurchased $95.3 million of shares through the first nine months, but inventory of $158 million was up 37% year over year.

Sonos Growth Channels Raise the Execution StakesEurope, the Middle East and Africa (EMEA) revenues increased 17.4% and Asia-Pacific sales advanced 27.2% in the third quarter, well ahead of the Americas' 3.8% growth. Sonos also has more than 17 million households and more than 53 million connected devices, supporting repeat-purchase potential.

Apple Inc. (AAPL - Free Report) markets HomePod as a smart-home speaker, adding a major technology platform to the connected-audio landscape. Amazon.com, Inc. (AMZN - Free Report) is extending Alexa+ across Echo devices as Sonos moves toward conversational computing. That raises the execution burden across hardware, software and marketing.

SONO Signals Point to Patience, Not a Clear BuyThe improving revenue trend, product cadence and liquidity argue against a bearish view, but the near-term margin reset makes the risk-reward balance less decisive. Investors may want clearer evidence that memory-cost mitigation can stabilize profitability without slowing household growth.

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

Its VGM Score of A and Growth Score of A are favorable, while the Value Score of B is also supportive. The Momentum Score of C is less compelling for near-term timing. Because the Style Scores complement rather than override the Zacks Rank, the current setup favors patience over an aggressive buy stance.

Key Takeaways Sonos Q3 EPS rose 52% to 27 cents as revenues climbed 9% to $375 million.Speaker revenues jumped 12.5%, while EMEA and Asia-Pacific sales grew 17.4% and 27.2%.Sonos sees Q4 revenue growth of 13-23%, but memory inflation may cut gross profit by $35 million. Sonos, Inc. (SONO - Free Report) reported third-quarter fiscal 2026 non-GAAP earnings of 27 cents per share, which soared 52% year over year and topped the Zacks Consensus Estimate of 24 cents. The 12.5% surprise reflected higher sales and disciplined spending despite rising memory costs.

Revenues increased 9% to $375 million, beating the $367 million consensus by 2.3%. Speaker demand and international expansion supported growth. Sonos’ installed base exceeded 53 million connected devices across more than 17 million homes.

Sonos’ Speaker Sales Lead Product GrowthRevenues from Sonos speakers rose 12.5% year over year to $285.3 million and remained the company’s largest product category. The quarter included the first full period of availability for Sonos Play and Era 100 SL, both of which contributed meaningfully to revenue growth.

Sonos system products generated $69.3 million, down 5.4%. Partner products and other revenues increased 15.4% to $20.7 million. Amp Multi is scheduled to ship on Aug. 25, extending the company’s offering for professional installers and larger multi-zone projects.

Image Source: Zacks Investment Research

SONO’s Overseas Markets Outpace the AmericasAmericas revenues advanced 3.8% to $238.4 million. Europe, the Middle East and Africa revenues climbed 17.4% to $114.2 million, while Asia-Pacific sales increased 27.2% to $22.7 million.

Foreign exchange added about one percentage point to reported growth. On a constant-currency basis, total revenues rose 7%, accelerating three percentage points from the second quarter.

Sonos’ Margin Gains Offset Memory InflationNon-GAAP gross profit increased 10.8% to $170.8 million. Non-GAAP gross margin expanded 80 basis points (bps) to 45.5%, even as higher memory costs created a $14 million year-over-year burden and reduced the margin by roughly 380 bps.

GAAP gross margin was 50.4%, including a $23.2 million benefit from refunds of previously paid tariffs. Excluding that non-recurring benefit, GAAP gross margin was 44.3%, up 90 bps year over year.

SONO Keeps Expenses in Check as EBITDA RisesGAAP operating expenses increased 3.4% to $157.8 million, mainly due to employee compensation, litigation spending and restructuring charges. Non-GAAP operating expenses rose 2.7% to $134.6 million and remained below the levels recorded in the first two quarters of fiscal 2026.

Adjusted EBITDA grew 23.5% to $44 million, with the margin improving to 11.7% from 10.3%. Non-GAAP operating income reached $36.2 million, up 57.3%, as gross-profit growth outpaced the increase in adjusted expenses.

Sonos Generates Cash and Returns CapitalCash provided by operating activities increased 23.5% to $46.2 million. Free cash flow rose 23.3% to $40.3 million, while cash and marketable securities totaled $261 million at quarter-end.

Sonos repurchased 2 million shares for $30 million, leaving $35 million under its authorization. Inventories were $158 million, up 37% year over year due to higher memory costs, new product launches and capitalized tariffs.

SONO Expects Faster Q4 Growth Despite Margin PressureFor the fourth quarter of fiscal 2026, SONO expects revenues of $325 million to $355 million, representing 13% to 23% growth. The 14-week quarter includes an extra week expected to add about $24 million in sales and eight percentage points to growth. Excluding that benefit, growth is projected at 4% to 15%.

GAAP gross margin is forecast between 39% and 41%, with non-GAAP gross margin about 120 bps higher. Management expects memory inflation to reduce gross profit by $35 million year over year. Adjusted EBITDA is projected between a loss of $11 million and a profit of $18 million.

For fiscal 2026, Sonos expects revenue growth of 6% to 8%, or 4% to 6% excluding the extra week. Adjusted EBITDA is projected at $181 million, up 37%, with an 11.7% margin. Management expects memory-mitigation actions to phase in through fiscal 2027.

Sonos’ Zacks RankSonos 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 CompaniesSAP SE (SAP - Free Report) reported second-quarter 2026 non-IFRS earnings per share of €1.59 ($1.85), which increased 6% from the year-ago quarter. The Zacks Consensus Estimate was pegged at $2.

Despite macroeconomic uncertainty, SAP reported total revenues on a non-IFRS basis of €9.9 billion ($11.5 billion), which increased 9% year over year (up 11% at constant currency or cc). The Zacks Consensus Estimate was pegged at $11.4 billion.

America Movil, S.A.B. de C.V. (AMX - Free Report) reported net income per ADR of 47 cents for the second quarter of 2026, up from 38 cents in the prior-year quarter. The earnings figure missed the Zacks Consensus Estimate of 52 cents. Total quarterly revenues rose 3.1% to Mex$241,071 million, driven by rapid momentum across the Service and Equipment segments.

BlackBerry Limited (BB - Free Report) reported first-quarter fiscal 2027 non-GAAP earnings per share of 4 cents. The figure beat the company’s estimate of 2-3 cents. In the year-ago quarter, it reported a non-GAAP EPS of 2 cents. The Zacks Consensus Estimate was pegged at 3 cents per share. BlackBerry generated $152.9 million in fiscal first-quarter revenue, representing 26% year-over-year growth.

Sonos, Inc. (SONO) Q3 2026 Earnings Call Transcript

3 Small Caps Hitting 52-Week Highs: Take Profits or Let Ride?Sonos NASDAQ: SONO reported third-quarter fiscal 2026 revenue of $375 million, up 9% from a year earlier and near the high end of its guidance range, as growth in Asia-Pacific and Europe, the Middle East and Africa offset more modest gains in the Americas.

CEO Tom Conrad said the quarter reflected an acceleration in the company’s growth trajectory after revenue rose 2% in the first half of the fiscal year. Non-GAAP gross margin was 45.5%, while adjusted EBITDA reached $44 million, up 24% year over year. The company also repurchased $30 million of stock during the quarter.

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Regional Growth and Profitability MarketBeat: Week in Review 5/30 – 6/3CFO Saori Casey said APAC revenue increased 27% year over year, EMEA revenue rose 17%, and Americas revenue grew 4%. On a constant-currency basis, APAC grew 21%, EMEA increased 14%, and the Americas rose 3.5%. Foreign exchange contributed about one percentage point to reported growth.

Casey said Sonos Play and Era 100 SL, which were available for the full quarter, contributed meaningfully to results. The company’s non-GAAP gross profit rose 11% to $171 million. However, higher memory costs reduced gross profit by about $14 million year over year, representing a 380-basis-point impact on gross margin.

Sonos Stock Sounds Cheap Down HereSonos received $24 million during the quarter related to refunds for duties paid under IEEPA. Of that amount, $23 million was recorded as a benefit to GAAP gross profit and $1 million was recorded as interest income. The company has filed claims totaling $41 million and expects to collect the remaining $18 million, though it has not recognized those amounts as a receivable because the timing of payment is uncertain.

Including tariff refunds, GAAP gross profit was $189 million and GAAP gross margin was 50.4%. Excluding refunds, GAAP gross margin was 44.3%. GAAP earnings per share were $0.25, including a $0.20 benefit from tariff refunds, compared with a loss of $0.03 per share a year earlier. Non-GAAP EPS rose 52% to $0.27.

Non-GAAP operating expenses increased 3% year over year to $135 million. The company ended the quarter with $261 million of net cash and marketable securities. Free cash flow was $40 million, up $8 million from the prior-year period.

Memory Costs Pressure Outlook Management said escalating computer-memory and related component costs are expected to remain a near-term challenge. Conrad said higher memory costs reduced third-quarter adjusted EBITDA by approximately $14 million. Without that impact, adjusted EBITDA would have been $58 million, up 64% year over year.

For the fourth quarter, Sonos expects higher memory prices to create a $35 million year-over-year headwind to gross profit, or roughly 1,000 basis points of gross-margin pressure. The company expects mitigation efforts to phase in progressively through fiscal 2027.

Conrad said Sonos is addressing the issue through supply management, cost negotiations, engineering changes intended to reduce each product’s memory requirements, and potential pricing actions. He said the efficiency work can be implemented as running changes to product lines without reducing product capabilities, future optionality or customer experience.

The company has not made material price increases on existing audio products. Conrad said Sonos remains focused on attracting new households during the holiday period, while considering pricing as one of several available levers. Management expects profitability to improve in fiscal 2028 and beyond, depending in part on the path of memory prices.

Fourth-Quarter and Full-Year Expectations Sonos forecast fourth-quarter revenue of $325 million to $355 million, representing reported growth of 13% to 23%, or 18% at the midpoint. The fiscal fourth quarter includes an extra week, which the company said should contribute approximately $24 million in sales and eight percentage points of year-over-year growth.

Excluding the additional week, the outlook implies revenue growth of 4% to 15%, or 10% at the midpoint. Management expects foreign exchange to have a slightly unfavorable effect on fourth-quarter revenue growth.

Fourth-quarter GAAP gross margin is expected to be 39% to 41%, excluding any tariff-refund benefit. Non-GAAP gross margin is expected to be approximately 120 basis points above GAAP gross margin. Adjusted EBITDA is projected between a loss of $11 million and positive $18 million, with a midpoint of $3 million. Fiscal 2026 revenue is expected to grow 6% to 8%, or 4% to 6% excluding the 53rd week. Fiscal 2026 adjusted EBITDA is expected to reach $181 million, up 37% year over year. For fiscal 2027, Casey said the low end of the company’s fourth-quarter gross-margin range is a reasonable framework for the year, with lower margins in the first half and some improvement in the second half as mitigation efforts take effect. She also said Sonos expects to remain disciplined on operating expenses.

Products, AI Focus and Leadership Changes Conrad said Sonos Amp Multi, a multi-zone amplifier aimed at installer and integrator partners, is scheduled to ship Aug. 25. He also said the company plans a product launch event in early September, where it intends to discuss work involving conversational computing and predictive intelligence in the home.

The CEO said Sonos’ installed base includes more than 53 million connected devices across more than 17 million homes. He argued that the company’s portfolio, audio expertise, home-system integrations and customer relationships position it to benefit as more intelligence is incorporated into home products.

Separately, Sonos said Chris Shackleton, co-founder and managing partner of Coliseum Capital Management, the company’s largest investor, will join its board.

Casey also announced plans to retire following a 35-year finance career. She will remain CFO until the company identifies a successor and completes a transition. Conrad said she helped establish financial rigor and operating discipline at Sonos during her tenure.

About Sonos (NASDAQ:SONO)Sonos, Inc is a consumer electronics company specializing in wireless home audio systems. The company's core business revolves around designing, developing and manufacturing smart speakers and soundbars that deliver high-fidelity audio and seamless multi-room listening experiences. Sonos products connect via Wi-Fi or Bluetooth and integrate with popular streaming services, enabling users to control music and other audio content through a dedicated mobile app, voice assistants or traditional controls.

Sonos offers a diversified product lineup that includes compact speakers such as Sonos One and Sonos Roam, premium models like Sonos Five and Sonos Move, home theater solutions including Sonos Beam and Sonos Arc, as well as accessories such as the Sonos Sub and Sonos Amp.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Sonos (SONO) was a big mover last session on higher-than-average trading volume. The latest trend in earnings estimate revisions might not help the stock continue moving higher in the near term.

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The collaboration marks the latest evolution of Sonos' in-car listening experience

SANTA BARBARA, Calif.--(BUSINESS WIRE)--Sonos today announced a partnership with Škoda, serving as the audio partner for the brand’s new flagship electric vehicle, Škoda Peaq. As part of the collaboration, Sonos has architected the in-cabin listening experience from the ground up, shaping how music, voice, and entertainment are experienced throughout the vehicle.

“Sonos is built around the idea that sound should move effortlessly through the home. The car is an increasingly natural extension of that — a place where the quality of what people hear matters just as much,” said Sonos CEO Tom Conrad. “As listening flows beyond the front door, this partnership enables us to imagine how the Sonos system can too. We are excited to partner with Škoda to create a truly premium in-car listening experience for the Peaq.”

Available as part of the optional Relax Package, the Sonos premium sound experience was purpose-built for the Peaq — custom-tuned to bring the depth and clarity Sonos is known for into the cabin. Every component was engineered specifically for the vehicle, with sound shaped to reflect what the artist intended. The result is deep, controlled bass, a front-focused soundstage that pulls you into the music, and rich, balanced sound across every seat — all tied together by spatial audio that makes the cabin feel like a space designed for listening.

For more details about the all-new Škoda Peaq featuring the Sonos premium sound system, please visit Škoda storyboard press center.

About Sonos

Sonos (Nasdaq: SONO) is a leading audio company dedicated to elevating life through sound. Sonos has built a connected system that brings together all the sounds people love, from music and movies to stories and conversations. Its portfolio of home theater speakers, components, plug-in and portable speakers, and headphones grows more powerful with every room and device added. Trusted by more than 17 million households in over 60 countries, Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.

More News From Sonos

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The Zacks Audio Video Production industry participants like Dolby Laboratories, Inc. (DLB - Free Report) , Sonos Inc. (SONO - Free Report) and LiveOne, Inc. (LVO - Free Report) are likely to benefit from investments in cutting-edge technology solutions that drive enhanced communication experiences. Streaming, creator content, gaming, spatial audio and AI-powered tools are reimagining value creation across the industry. Rapid technological advances, such as 4K, 8K and immersive audio formats, are boosting the demand for new devices, which bodes well for participants like Dolby. The players also stand to gain as they increase focus on direct-to-customer sales channels.

However, the industry faces some headwinds. Hardware demand remains cyclical and sensitive to consumer spending. Global macroeconomic uncertainty amid escalating trade tensions, tariffs and associated inflationary pressure is likely to keep consumer spending in check. This does not bode well for the participants. A highly promotional environment and stiff competition from importers of comparatively low-priced devices are denting margins. Online accessibility of recording equipment and the availability of distribution channels on the Internet are additional headwinds.

Industry Description The Zacks Audio Video Production industry comprises television, speaker, video player and camcorder manufacturers. It includes companies that offer gaming consoles, drones and high-end cameras for individuals and industrial markets. These firms provide state-of-the-art audio, imaging and voice technologies that enhance entertainment and communication experiences. Some industry participants develop audio and imaging products, including digital cinema servers and products for film production and entertainment industries. Apart from providing theatrical and television production services for cinema exhibitions, broadcast and home entertainment, these companies work with film studios, content creators, broadcasters and video game designers. Some prominent players are present in the music and image-based software markets worldwide.

4 Trends Shaping the Future of the Audio-Video Production Industry Technological Advancement to Spur Growth: From rapid technological advances like 4K, 8K and immersive audio formats, the demand for high-resolution visual and audio experiences is a major growth driver. The rise of streaming or OTT platforms is fueling this trend, as consumers and businesses seek to recreate a cinematic atmosphere at home. Gaming is another catalyst, as PC and console gamers now seek enhanced visuals and immersive sound design. The rise of the creator economy is also fueling the demand for enhanced cameras and editing tools. Industry players like GoPro are benefiting from this trend, as its cameras are popular among creators. Automotive audio represents another lucrative opportunity as vehicles become more software-driven and experience-focused.

Increasing Demand for Premium Entertainment: The industry performed well despite drastic changes in how media is consumed and distributed. The rise in demand for premium entertainment from record labels, TV producers and advertisers is likely to stoke profitable growth. Strong demand across all regions with a more direct-to-consumer, subscription-centric model bodes well for industry participants.

Macroeconomic Headwinds Likely to Hurt Consumer Demand: The global macroeconomic uncertainty amid escalating trade tensions and tariffs, and associated inflationary pressures is likely to keep consumer spending, especially discretionary purchases, in check. While companies keep investing in market share gains and supply-chain resilience, a shortage of critical hardware components due to the disruption in the supply chain could hurt revenues in the near term. Fluctuations in commodity pricing for different components are additional concerns. Elevated promotional activity to boost sales amid weak spending is also affecting the performance of these industry participants.

Aggressive Competition: In the United States, smart-connected televisions, microphones and speaker enclosures are the most popular electronic devices among customers. However, U.S.-based manufacturers of audio and video systems face intense competition from importers of comparatively low-priced devices, particularly from China, Vietnam and Mexico. These firms face stiff competition across all end markets, often leading to intense price wars and margin contraction.

Zacks Industry Rank Indicates Bright Prospects The Zacks Audio Video Production industry is housed within the broader Zacks Consumer Discretionary sector. It currently has a Zacks Industry Rank of #16, placing it in the top 7% of more than 244 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than two to one.

Before we present a few audio-video production stocks you may want to consider for your portfolio, let’s look at the industry’s recent stock market performance and valuation picture.

Industry Lags the Sector & the S&P 500 The Zacks Audio Video Production industry lags the broader Zacks Consumer Discretionary sector and the S&P 500 composite in the past year.

The industry has lost 13.8% over this period against the S&P 500’s 21.3% return. The broader sector has edged down 3% over the same timeframe.

1-Year Price Performance

 

Industry's Current Valuation Price-to-earnings is commonly used for valuing audio-video production stocks. The industry has a forward 12-month P/E of 16.94X compared with the S&P 500’s 21.57X. It is below the sector’s forward 12-month P/E of 17.22X.

In the past five years, the industry has traded as high as 23.92X and as low as 16.94X, with a median of 21.24X, as the chart below shows.

Price-to-Earnings Forward Ratio (Past Five Years)

 

3 Audio Video Production Stocks to Consider Sonos: Headquartered in Santa Barbara, CA, Sonos operates as a consumer electronics company that is primarily involved in the manufacturing of speakers with immersive sound experiences.

Product innovation is reaccelerating after a deliberate pause, with launches in the pipeline for the second half of fiscal 2026. Following the launch of Amp Multi, the company launched Sonos Play & Era 100 SL speakers last week. With this launch, the company is reinforcing its strategy of building a sound system that grows with users over time rather than forcing them to replace devices with each upgrade. The Sonos Play is positioned as the brand’s most versatile speaker to date. It combines the performance expected from a home speaker with the portability needed for on-the-go listening.

The Era 100 SL is a mic-free version of the popular Era 100, designed for users who prefer a more private listening experience without requiring a voice assistant functionality. By removing microphones and streamlining certain features, Sonos has created a more affordable gateway into its ecosystem.

Sonos is also refining its go-to-market strategy while expanding geographically to tap underpenetrated international markets. Sonos currently holds about 6% share of the $24-billion premium audio market, underscoring significant headroom for share gains.

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

At present, SONO sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.  

The Zacks Consensus Estimate for its fiscal 2026 bottom line is pegged at $1.20, unchanged in the past 30 days. The company’s shares have gained 16.8% in the past year.

Price & Consensus: SONO

Dolby: San Francisco-based Dolby develops audio and imaging technologies that revolutionize entertainment for user-generated content, TV shows, films, music and gaming.Dolby continues to see strong engagement across its ecosystem of creators, distributors and device OEMs for its Dolby Atmos and Dolby Vision technologies. The company’s Dolby Vision 2 for TVs builds on Dolby Vision and is designed to meet evolving viewer expectations while enhancing movies, sports and gaming with more vivid pictures and brighter colors across mainstream and premium TVs. Peacock and Canal+ announced support as early launch partners, and TP Vision (Philips), Hisense and TCL introduced upcoming models supporting Dolby Vision 2. Dolby expects the first Dolby Vision 2 TVs to be available by the end of the year.

Dolby is extending its presence in the automotive market, driven by strong demand from OEMs to elevate in-car entertainment quality. Dolby stated that it now has partnerships with more than 35 OEMs, up from 20 a year ago.  It also announced collaboration with Qualcomm to integrate Dolby Atmos and Dolby Vision into the latter’s Gen 5 Snapdragon Automotive platform. Integrations like these are aimed at expanding its footprint into the auto ecosystem.

For fiscal 2026, the company expects revenues of $1.4-$1.45 billion compared with the prior mentioned $1.39-$1.44 billion. The company reported revenues of $1.35 billion in fiscal 2025. Licensing revenues are projected to be $1.295-$1.345 billion compared with the previously stated $1.285 billion to $1.335 billion.

With Dolby Atmos, Dolby Vision and imaging patents growing at roughly 15% and accounting for nearly half of its licensing revenues, the company expects foundational revenues to decline slightly overall.

At present, DLB carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its fiscal 2026 bottom line is pegged at $4.31, unchanged in the past seven days. Shares have declined 25.5% in the past year.

Price & Consensus: DLB

LiveOne: Headquartered in Los Angeles, CA, LiveOne provides a platform for live stream and on-demand audio, video, and podcast/vodcast content in music, comedy, and pop culture and is the owner of LiveXLive, Slacker Radio, PodcastOne and React Presents, among others. LiveOne is focused on aggressively cutting down costs (declining 52% year over year in the third quarter of fiscal 2026) and reducing debt to strengthen its balance sheet. It is leveraging AI to streamline its workforce.

The company is strategically focusing on expanding its B2B deals, having established significant new agreements and identifying potential partnerships in the pipeline. On the last reported quarter’s earnings call, LVO highlighted that the pipeline was up 30% in the last 4 months, with more than 100 active enterprise opportunities (ranging from $1 billion to $1 trillion companies). Strengthening partnerships with platforms like Amazon, Apple and Tesla, and the expected launch of three Fortune 500 partnerships, bode well.

LVO is also targeting conversion of more than 1 million free and ad-supported users into paid tiers, while leveraging its 65 million-user database to launch proprietary products.

Management expects fiscal 2027 revenues of $85-$95 million, with $8-$10 million in adjusted EBITDA.

At present, LVO carries a Zacks Rank #2. The Zacks Consensus Estimate for its fiscal 2026 bottom line is pegged at a loss of $1.54, unchanged in the past 30 days. Shares have fallen 25.7% in the past year.

Price & Consensus: LVO

Here are five stocks added to the Zacks Rank #1 (Strong Buy) List today:

Astec Industries, Inc. (ASTE - Free Report) : This manufacturer of road building and construction equipment and components has seen the Zacks Consensus Estimate for its current year earnings increasing 14.6% over the last 60 days.

Sonos, Inc. (SONO - Free Report) : This audio products and services company has seen the Zacks Consensus Estimate for its current year earnings increasing 18.8% over the last 60 days.

BWX Technologies, Inc. (BWXT - Free Report) : This nuclear component manufacturer has seen the Zacks Consensus Estimate for its current year earnings increasing 5.4% over the last 60 days.

BCB Bancorp, Inc. (BCBP - Free Report) : This bank holding company for BCB Community Bank has seen the Zacks Consensus Estimate for its current year earnings increasing 11.9% over the last 60 days.

CrossAmerica Partners LP (CAPL - Free Report) : This distributor of motor fuels and owner and lessor of real estate used in the retailing of motor fuels, and operator of convenience stores has seen the Zacks Consensus Estimate for its current year earnings increasing 7.5% over the last 60 days.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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SANTA BARBARA, Calif.--(BUSINESS WIRE)--Sonos, Inc. (Nasdaq: SONO) today announced that after market close on Monday, May 4, 2026 the company will report financial results for the second quarter ended March 28, 2026. The company will issue a press release and accompanying slide presentation at that time which will be accessible at https://investors.sonos.com/reports-and-filings/default.aspx#section=earningsreports.

The company will host a conference call and Q&A to discuss the results on the same day at 4:30 p.m. Eastern Time. A live webcast of the conference call and Q&A will be accessible at https://investors.sonos.com/news-and-events/default.aspx. A replay of the webcast and transcript will be available through the same link following the conference call.

The live conference call may also be accessed toll free by dialing 1 (888) 330-2454 with conference ID 8641747. Participants outside the U.S. can access the call by dialing 1 (240) 789-2714.

About Sonos

Sonos (Nasdaq: SONO) is a leading audio company dedicated to elevating life through sound. Sonos has built a connected system that brings together all the sounds people love, from music and movies to stories and conversations. Its portfolio of home theater speakers, components, plug-in and portable speakers, and headphones grows more powerful with every room and device added. Trusted by more than 17 million households in over 60 countries, Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.

More News From Sonos

Back to Newsroom

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

“The first half of Fiscal 2026 marks an important turning point for Sonos as we return to growth and change the trajectory of the business,” said Tom Conrad, Chief Executive Officer of Sonos. “The progress we’re seeing comes from coordinated execution across the areas that matter most: better products, a stronger software experience, more effective marketing, and continued expansion in growth markets. This translated into 8% revenue growth in Q2, our first positive Q2 Adjusted EBITDA in four years, and our third consecutive semiannual period of revenue growth improvement. We enter the second half with momentum and a clear focus on building durable growth while staying disciplined in how we operate.”

"Q2 results overall came in strong against our expectations, with revenue near the high end of our guidance, and Adjusted EBITDA above the midpoint. First half Adjusted EBITDA is up 48% year over year, reflecting gross profit dollar growth combined with operating expense reductions," said Saori Casey, Chief Financial Officer. "Q2 marks our seventh consecutive quarter of executing against our commitments"

Second Quarter Fiscal 2026 Financial Highlights (unaudited)

Revenue increased 8% year-over-year to $282 million GAAP gross margin of 44.3%, Non-GAAP gross margin of 46.0% GAAP net loss improved by $41 million year-over-year to ($29) million, GAAP diluted loss per share (EPS) improved by $0.34 year-over-year to ($0.24) Non-GAAP net loss improved by $19 million year-over-year to ($3) million, Non-GAAP diluted EPS improved by $0.16 year-over-year to ($0.02) Adjusted EBITDA increased $3 million year-over-year to $2 million Returned $40 million to shareholders through repurchase of 2.5 million shares First Half Fiscal 2026 Financial Highlights (unaudited)

Revenue increased 2% year-over-year to $827 million GAAP gross margin of 45.7%, Non-GAAP gross margin of 47.0% GAAP net income improved by $85 million year-over-year to $65 million, GAAP diluted EPS improved by $0.68 year-over-year to $0.52 Non-GAAP net income improved by $49 million year-over-year to $113 million, Non-GAAP diluted EPS improved by $0.40 year-over-year to $0.91 Adjusted EBITDA increased by $44 million year-over-year to $134 million Returned $65 million to shareholders through repurchase of 4.0 million shares Guidance

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

Supplemental Earnings Presentation

The company has posted a supplemental earnings presentation accompanying its Second 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 Second Quarter Fiscal 2026 results on May 4, 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 (Loss) Income

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

Three Months Ended

Six Months Ended

March 28,
2026

March 29,
2025

March 28,
2026

March 29,
2025

Revenue

$

281,526

$

259,756

$

827,189

$

810,613

Cost of revenue

156,877

146,147

449,080

455,597

Gross profit

124,649

113,609

378,109

355,016

Operating expenses

Research and development

64,134

77,423

123,896

158,261

Sales and marketing

62,376

64,210

127,650

150,854

General and administrative

29,714

33,200

57,723

59,032

Total operating expenses

156,224

174,833

309,269

368,147

Operating (loss) income

(31,575

)

(61,224

)

68,840

(13,131

)

Other income (expense), net

Interest income

1,911

1,973

3,260

3,834

Interest expense

(104

)

(109

)

(220

)

(219

)

Other (expense) income, net

(1,361

)

193

(941

)

(5,836

)

Total other income (expense), net

446

2,057

2,099

(2,221

)

(Loss) income before (benefit from) provision for income taxes

(31,129

)

(59,167

)

70,939

(15,352

)

(Benefit from) provision for income taxes

(2,243

)

10,977

6,027

4,555

Net (loss) income

$

(28,886

)

$

(70,144

)

$

64,912

$

(19,907

)

(Loss) earnings per share:

Basic

$

(0.24

)

$

(0.58

)

$

0.54

$

(0.16

)

Diluted

$

(0.24

)

$

(0.58

)

$

0.52

$

(0.16

)

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

Basic

120,209,712

119,919,163

120,349,630

120,995,375

Diluted

120,209,712

119,919,163

123,651,309

120,995,375

Total comprehensive (loss) income

Net (loss) income

(28,886

)

(70,144

)

64,912

(19,907

)

Change in foreign currency translation adjustment

(1,763

)

656

(28

)

(460

)

Net unrealized loss on marketable securities

(59

)

(33

)

(42

)

(117

)

Comprehensive (loss) income

$

(30,708

)

$

(69,521

)

$

64,842

$

(20,484

)

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except par values)

As of

March 28,
2026

September 27,
2025

Assets

Current assets:

Cash and cash equivalents

$

200,156

$

174,668

Marketable securities

48,897

52,858

Accounts receivable, net

95,511

65,847

Inventories

160,840

171,020

Prepaids and other current assets

34,718

39,642

Total current assets

540,122

504,035

Property and equipment, net

63,038

72,277

Operating lease right-of-use assets

43,950

45,297

Goodwill

82,854

82,854

Intangible assets, net

67,741

75,356

Deferred tax assets

10,409

10,509

Other noncurrent assets

31,368

32,950

Total assets

$

839,482

$

823,278

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

162,927

$

184,109

Accrued expenses

66,736

79,094

Accrued compensation

24,298

21,331

Deferred revenue, current

38,772

21,771

Other current liabilities

48,374

46,107

Total current liabilities

341,107

352,412

Operating lease liabilities, noncurrent

51,803

53,288

Deferred revenue, noncurrent

59,161

59,453

Deferred tax liabilities

118

126

Other noncurrent liabilities

2,930

2,774

Total liabilities

455,119

468,053

Commitments and contingencies

Stockholders’ equity:

Common stock, $0.001 par value

123

123

Treasury stock

(56,653

)

(37,398

)

Additional paid-in capital

486,326

502,775

Accumulated deficit

(47,166

)

(112,078

)

Accumulated other comprehensive income

1,733

1,803

Total stockholders’ equity

384,363

355,225

Total liabilities and stockholders’ equity

$

839,482

$

823,278

Condensed Consolidated Statements of Cash Flows

(unaudited, dollars in thousands)

Six Months Ended

March 28,
2026

March 29,
2025

Cash flows from operating activities

Net income (loss)

$

64,912

$

(19,907

)

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

Stock-based compensation expense

30,056

45,436

Depreciation and amortization

25,862

32,778

Restructuring and other charges

848

4,889

Provision for excess and obsolete inventory

343

(143

)

Deferred income taxes

72

997

Other

4,402

1,528

Foreign currency transaction loss (gain)

1,222

(72

)

Changes in operating assets and liabilities:

Accounts receivable

(31,660

)

4,702

Inventories

9,837

92,615

Other assets

4,796

1,328

Accounts payable and accrued expenses

(33,297

)

(83,634

)

Accrued compensation

3,522

10,456

Deferred revenue

16,993

(257

)

Other liabilities

25

5,791

Net cash provided by operating activities

97,933

96,507

Cash flows from investing activities

Purchases of marketable securities

(25,219

)

(25,900

)

Purchases of property and equipment

(10,734

)

(18,662

)

Maturities of marketable securities

29,140

27,400

Net cash used in investing activities

(6,813

)

(17,162

)

Cash flows from financing activities

Payments for repurchase of common stock

(65,121

)

(60,602

)

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

(15,929

)

(16,246

)

Proceeds from exercise of stock options

15,138

2,654

Payments for debt issuance costs

(780

)

—

Net cash used in financing activities

(66,692

)

(74,194

)

Effect of exchange rate changes on cash and cash equivalents

1,060

(1,725

)

Net increase in cash and cash equivalents

25,488

3,426

Cash and cash equivalents

Beginning of period

174,668

169,732

End of period

$

200,156

$

173,158

Supplemental disclosure

Cash paid for interest

$

123

$

126

Cash paid for taxes, net of refunds

$

3,346

$

16,493

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

$

4,473

$

1,149

Supplemental disclosure of non-cash investing and financing activities

Purchases of property and equipment in accounts payable and accrued expenses

$

4,588

$

1,311

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

$

130

$

264

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

(unaudited, in thousands, except percentages)

Three Months Ended

Six Months Ended

March 28,
2026

March 29,
2025

March 28,
2026

March 29,
2025

Reconciliation of GAAP cost of revenue

GAAP cost of revenue

$

156,877

$

146,147

$

449,080

$

455,597

Stock-based compensation expense

1,125

1,606

2,452

2,955

Amortization of intangibles

3,144

3,144

7,525

6,474

Restructuring and other charges

664

3,935

664

3,935

Non-GAAP cost of revenue

$

151,944

$

137,462

$

438,439

$

442,233

Reconciliation of GAAP gross profit

GAAP gross profit

$

124,649

$

113,609

$

378,109

$

355,016

Stock-based compensation expense

1,125

1,606

2,452

2,955

Amortization of intangibles

3,144

3,144

7,525

6,474

Restructuring and other charges

664

3,935

664

3,935

Non-GAAP gross profit

$

129,582

$

122,294

$

388,750

$

368,380

GAAP gross margin

44.3

%

43.7

%

45.7

%

43.8

%

Non-GAAP gross margin

46.0

%

47.1

%

47.0

%

45.4

%

Reconciliation of Selected Non-GAAP Financial Measures

(unaudited, dollars in thousands)

Three Months Ended

Six Months Ended

March 28,
2026

March 29,
2025

March 28,
2026

March 29,
2025

Research and Development (GAAP)

$

64,134

$

77,423

$

123,896

$

158,261

Stock-based compensation

5,471

8,021

11,960

21,336

Amortization of intangibles

20

18

40

196

Restructuring and other charges (2)(3)

857

12,766

857

12,706

Research and Development (Non-GAAP)

$

57,786

$

56,618

$

111,039

$

124,023

Sales and Marketing (GAAP)

$

62,376

$

64,210

$

127,650

$

150,854

Stock-based compensation

2,763

3,980

5,608

9,612

Amortization of intangibles

-

-

-

-

Restructuring and other charges (2)(3)

1,453

2,792

1,453

2,792

Sales and Marketing (Non-GAAP)

$

58,160

$

57,438

$

120,589

$

138,450

General and Administrative (GAAP)

29,714

33,200

57,723

59,032

Stock-based compensation

5,505

6,495

10,036

11,533

Legal and transaction related costs

3,523

1,429

6,034

1,624

Amortization of intangibles

24

24

48

47

Restructuring and other charges (2)(3)

90

4,207

90

4,207

General and Administrative (Non-GAAP)

$

20,572

$

21,045

$

41,515

$

41,621

Total Operating Expenses (GAAP)

$

156,224

$

174,833

$

309,269

$

368,147

Stock-based compensation

13,739

18,496

27,604

42,481

Legal and transaction related costs (1)

3,523

1,429

6,034

1,624

Amortization of intangibles

44

42

88

243

Restructuring and other charges (2)(3)

2,400

19,765

2,400

19,705

Operating Expenses (Non-GAAP)

$

136,518

$

135,101

$

273,143

$

304,094

Total Operating (Loss) Income (GAAP)

$

(31,575

)

$

(61,224

)

$

68,840

$

(13,131

)

Stock-based compensation

14,864

20,102

30,056

45,436

Legal and transaction related costs (1)

3,523

1,429

6,034

1,624

Amortization of intangibles

3,188

3,186

7,613

6,717

Restructuring and other charges (2)(3)

3,064

23,700

3,064

23,640

Operating (Loss) Income (Non-GAAP)

$

(6,936

)

$

(12,807

)

$

115,607

$

64,286

Depreciation

8,653

11,981

18,249

26,061

Adjusted EBITDA (Non-GAAP)

$

1,717

$

(826

)

$

133,856

$

90,347

Total Operating (Loss) Income (GAAP)

$

(31,575

)

$

(61,224

)

$

68,840

$

(13,131

)

Stock-based compensation expense

14,864

20,102

30,056

45,436

Legal and transaction related costs (1)

3,523

1,429

6,034

1,624

Amortization of intangibles

3,188

3,186

7,613

6,717

Restructuring and other charges (2)(3)

3,064

23,700

3,064

23,640

Operating (Loss) Income (Non-GAAP)

$

(6,936

)

$

(12,807

)

$

115,607

$

64,286

Interest income

1,911

1,973

3,260

3,834

Interest expense

(104

)

(109

)

(220

)

(219

)

Pre-tax (Loss) Income (Non-GAAP)

$

(5,129

)

$

(10,943

)

$

118,647

$

67,901

(Benefit from) provision for income taxes

(2,243

)

10,977

6,027

4,555

Net (loss) income (Non-GAAP)

(2,886

)

(21,920

)

112,620

63,346

Weighted-average shares non-GAAP, diluted

120,209,712

119,919,163

123,651,309

123,750,251

Non-GAAP (loss) earnings per share, diluted

$

(0.02

)

$

(0.18

)

$

0.91

$

0.51

(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 six months ended March 28, 2026, include costs associated with non-recurring organizational changes driven by new leadership, charges related to the partial abandonment of office space in support of operational efficiencies, and costs associated with exiting a partnership with one of our contract manufacturers to consolidate and improve supply chain efficiency.

(3) Restructuring and other charges for the three and six months ended March 29, 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 Net (Loss) Income to Adjusted EBITDA

(unaudited, dollars in thousands except percentages)

Three Months Ended

Six Months Ended

March 28,
2026

March 29,
2025

March 28,
2026

March 29,
2025

(In thousands, except percentages)

Net (loss) income

$

(28,886

)

$

(70,144

)

$

64,912

$

(19,907

)

Add (deduct):

Depreciation and amortization

11,841

15,167

25,862

32,778

Stock-based compensation expense

14,864

20,102

30,056

45,436

Interest income

(1,911

)

(1,973

)

(3,260

)

(3,834

)

Interest expense

104

109

220

219

Other expense (income), net

1,361

(193

)

941

5,836

(Benefit from) provision for income taxes

(2,243

)

10,977

6,027

4,555

Legal and transaction related costs (1)

3,523

1,429

6,034

1,624

Restructuring and other charges (2)(3)

3,064

23,700

3,064

23,640

Adjusted EBITDA

$

1,717

$

(826

)

$

133,856

$

90,347

Revenue

$

281,526

$

259,756

$

827,189

$

810,613

Net (loss) income margin

(10.3

)%

(27.0

)%

7.8

%

(2.5

)%

Adjusted EBITDA margin

0.6

%

(0.3

)%

16.2

%

11.1

%

(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) Restructuring and other charges for the three and six months ended March 28, 2026, include costs associated with non-recurring organizational changes driven by new leadership, charges related to the partial abandonment of office space in support of operational efficiencies, and costs associated with exiting a partnership with one of our contract manufacturers to consolidate and improve supply chain efficiency.

(3) Restructuring and other charges for the three and six months ended March 29, 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 (Loss) Income to Non-GAAP Net (Loss) Income

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

Three Months Ended

Six Months Ended

March 28,
2026

March 29,
2025

March 28,
2026

March 29,
2025

GAAP net (loss) income

$

(28,886

)

$

(70,144

)

$

64,912

$

(19,907

)

Stock-based compensation expense

14,864

20,102

30,056

45,436

Legal and transaction related costs (1)

3,523

1,429

6,034

1,624

Amortization of intangibles

3,188

3,186

7,613

6,717

Restructuring and other charges (2)(3)

3,064

23,700

3,064

23,640

Other expense (income), net

1,361

(193

)

941

5,836

Non-GAAP net (loss) income

$

(2,886

)

$

(21,920

)

$

112,620

$

63,346

(Loss) earnings per share

GAAP (loss) earnings per share, diluted

$

(0.24

)

$

(0.58

)

$

0.52

$

(0.16

)

Non-GAAP (loss) earnings per share, diluted

$

(0.02

)

$

(0.18

)

$

0.91

$

0.51

Shares used to calculate (loss) earnings per share

Weighted-average shares GAAP, diluted

120,209,712

119,919,163

123,651,309

120,995,375

Weighted-average shares non-GAAP, diluted

120,209,712

119,919,163

123,651,309

123,750,251

(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) Restructuring and other charges for the three and six months ended March 28, 2026, include costs associated with non-recurring organizational changes driven by new leadership, charges related to the partial abandonment of office space in support of operational efficiencies, and costs associated with exiting a partnership with one of our contract manufacturers to consolidate and improve supply chain efficiency.

(3) Restructuring and other charges for the three and six months ended March 29, 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 Cash Flows (Used in) Provided by Operating Activities to Free Cash Flow

(unaudited, dollars in thousands)

Three Months Ended

Six Months Ended

March 28,
2026

March 29,
2025

March 28,
2026

March 29,
2025

Cash flows (used in) provided by operating activities

$

(65,374

)

$

(59,666

)

$

97,933

$

96,507

Less: Purchases of property and equipment

(4,776

)

(5,556

)

(10,734

)

(18,662

)

Free cash flow

$

(70,150

)

$

(65,222

)

$

87,199

$

77,845

Revenue by Product Category

(unaudited, dollars in thousands)

Three Months Ended

Six Months Ended

March 28,
2026

March 29,
2025

March 28,
2026

March 29,
2025

(In thousands)

Sonos speakers

$

210,018

$

194,519

$

669,258

$

661,661

Sonos system products

52,411

50,540

117,469

110,814

Partner products and other revenue

19,097

14,697

40,462

38,138

Total revenue

$

281,526

$

259,756

$

827,189

$

810,613

Revenue by Geographical Region

(unaudited, dollars in thousands)

Three Months Ended

Six Months Ended

March 28,
2026

March 29,
2025

March 28,
2026

March 29,
2025

Americas

$

180,608

$

176,802

$

509,485

$

501,385

Europe, Middle East and Africa

83,161

68,785

272,602

266,397

Asia Pacific

17,757

14,169

45,102

42,831

Total revenue

$

281,526

$

259,756

$

827,189

$

810,613

Stock-based Compensation

(unaudited, dollars in thousands)

Three Months Ended

Six Months Ended

March 28,
2026

March 29,
2025

March 28,
2026

March 29,
2025

(In thousands)

Cost of revenue

$

1,125

$

1,606

$

2,452

$

2,955

Research and development

5,471

8,557

11,960

21,872

Sales and marketing

2,763

4,027

5,608

9,659

General and administrative

5,505

9,055

10,036

14,093

Total stock-based compensation expense

$

14,864

$

23,245

$

30,056

$

48,579

Amortization of Intangibles

(unaudited, dollars in thousands)

Three Months Ended

Six Months Ended

March 28,
2026

March 29,
2025

March 28,
2026

March 29,
2025

Cost of revenue

$

3,144

$

3,144

$

7,525

$

6,474

Research and development

20

18

40

196

Sales and marketing

-

-

-

-

General and administrative

24

24

48

47

Total amortization of intangibles

$

3,188

$

3,186

$

7,613

$

6,717

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 (loss) income, non-GAAP pre-tax (loss) income, free cash flow, non-GAAP gross margin, non-GAAP net (loss) income, non-GAAP cost of revenue, non-GAAP gross profit and non-GAAP diluted earnings (loss) per share. These non-GAAP financial measures are not based on any standardized methodology prescribed by U.S. GAAP and are not necessarily comparable to similarly titled measures presented by other companies. We use these non-GAAP financial measures to evaluate our operating performance and trends and make planning decisions. We believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses and other items that we exclude in these non-GAAP financial measures. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects and allowing for greater transparency with respect to a key financial metric used by our management in its financial and operational decision-making. Non-GAAP financial measures should not be considered in isolation of, or as an alternative to, measures prepared in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of these financial measures to their nearest U.S. GAAP financial equivalents provided in the financial statement tables above. We define Adjusted EBITDA as net (loss) income adjusted to exclude the impact of depreciation and amortization, stock-based compensation expense, interest income, interest expense, other expense (income), income taxes, restructuring and other charges, legal and transaction related fees and other items that we do not consider representative of our underlying operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. We define non-GAAP operating (loss) income as total operating loss adjusted to exclude stock-based compensation expense, legal and transaction related costs, amortization of intangibles and restructuring and other charges. We define non-GAAP pre-tax (loss) income as non-GAAP operating (loss) income adjusted to include interest income and to exclude interest expense. We define free cash flow as net cash from operations less purchases of property and equipment. We define non-GAAP gross margin as GAAP gross margin, excluding stock-based compensation, amortization of intangible assets and restructuring and other charges. We define non-GAAP cost of revenue as GAAP cost of revenue less stock-based compensation and amortization of intangibles. We define non-GAAP gross profit as GAAP gross profit less stock-based compensation, amortization of intangibles, and restructuring and other charges. We calculate non-GAAP net (loss) income as GAAP net (loss) income less stock-based compensation, legal and transaction related fees, amortization of intangibles, other expense (income) and restructuring and other charges. We calculate non-GAAP diluted earnings (loss) per share as non-GAAP net (loss) income divided by non-GAAP weighted average diluted shares outstanding during the period. We do not provide a reconciliation of forward-looking non-GAAP financial measures to their comparable GAAP financial measures because we cannot do so without unreasonable effort due to unavailability of information needed to calculate reconciling items and due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP financial measures in future periods. When planning, forecasting and analyzing future periods, we do so primarily on a non-GAAP basis without preparing a GAAP analysis as that would require estimates for items such as stock-based compensation, which is inherently difficult to predict with reasonable accuracy. Stock-based compensation expense is difficult to estimate because it depends on our future hiring and retention needs, as well as the future fair market value of our common stock, all of which are difficult to predict and subject to constant change. In addition, for purposes of setting annual guidance, it would be difficult to quantify stock-based compensation expense for the year with reasonable accuracy in the current quarter. As a result, we do not believe that a GAAP reconciliation would provide meaningful supplemental information about our outlook.

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding our long-term outlook, financial, growth and business strategies and opportunities, market growth and our market share, our operating model and cost structure, new product launches, including critical reception and the planned timing of such launches, and other factors affecting variability in our financial results. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors, including, but not limited to: difficulties in and effect of implementing improvements to our operating model and cost structure; the risk that restructuring and related charges may be greater than anticipated or not occur in the expected time frame; local law requirements in various jurisdictions regarding elimination of positions; our ability to accurately forecast product demand and effectively forecast and manage owned and channel inventory levels; our ability to successfully introduce software updates; our ability to maintain, enhance and protect our brand image; the impact of global economic, market and political events, including tariffs, global trade tensions, continued inflationary pressures, high interest rates and, in certain markets, foreign currency exchange rate fluctuations; changes in consumer income and overall consumer spending as a result of economic or political uncertainty or conditions, including tariffs; changes in consumer spending patterns; our ability to successfully introduce new products and services and maintain or expand the success of our existing products; the success of our efforts to expand our direct-to-consumer channel; the success of our financial, growth and business strategies; our ability to compete in the market and maintain or expand market share; our ability to maintain relationships with our channel, distribution and technology partners; our ability to meet product demand and manage any product availability delays; supply chain challenges, including shipping and logistics challenges and component supply-related challenges, including memory costs and constraints; our ability to protect our brand and intellectual property; our use of artificial intelligence; and the other risk factors identified in our filings with the Securities and Exchange Commission (the “SEC”), including our most recent Annual Report on Form 10-K and subsequent filings. Copies of our SEC filings are available free of charge at the SEC’s website at www.sec.gov, on our investor relations website at https://investors.sonos.com/reports-and-filings/default.aspx or upon request from our investor relations department. All forward-looking statements herein reflect our opinions only as of the date of this press release, and we undertake no obligation, and expressly disclaim any obligation, to update forward-looking statements herein in light of new information or future events. Sonos and Sonos product names are trademarks or registered trademarks of Sonos, Inc. All other product names and services may be trademarks or service marks of their respective owners.

About Sonos

Sonos (Nasdaq: SONO) is a leading audio company dedicated to elevating life through sound. Sonos has built a connected system that brings together all the sounds people love, from music and movies to stories and conversations. Its portfolio of home theater speakers, components, plug-in and portable speakers, and headphones grows more powerful with every room and device added. Trusted by more than 17 million households in over 60 countries, Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.

More News From Sonos.

Sonos, Inc. (SONO) Q2 2026 Earnings Call Transcript

Sonos faces gross margin pressure from surging memory prices, but I reiterate my 'Buy' rating, viewing recent downside as short-term noise. SONO is actively mitigating memory cost headwinds via tariff refunds, engineering redesigns, and disciplined opex management, without resorting to price hikes. Strong Q2 results: revenue grew 8% y/y to $281.5 million, beating expectations and supporting management's confidence in accelerating growth for 2H FY26.

-

SANTA BARBARA, Calif.--(BUSINESS WIRE)--Sonos, Inc. (Nasdaq: SONO) today announced that Saori Casey, Chief Financial Officer, will participate in a fireside chat with Jefferies analyst Brent Thill at the 2026 Jefferies Software, Internet, and AI Conference on Wednesday, May 27th. The fireside chat will begin at 3:30 pm Pacific. A live webcast and replay of the fireside chat will be accessible in the News & Events section of the Sonos investor relations website: https://investors.sonos.com/news-and-events/default.aspx#section=events-and-presentations.

About Sonos

Sonos (Nasdaq: SONO) is a leading audio company dedicated to elevating life through sound. Sonos has built a connected system that brings together all the sounds people love, from music and movies to stories and conversations. Its portfolio of home theater speakers, components, plug-in and portable speakers, and headphones grows more powerful with every room and device added. Trusted by more than 17 million households in over 60 countries, Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.

More News From Sonos

Back to Newsroom

A month has gone by since the last earnings report for Sonos (SONO - Free Report) . Shares have added about 17.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Sonos due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Sonos' Reports Q2 Loss

Sonos reported second-quarter fiscal 2026 non-GAAP loss per share of 2 cents, narrower than the Zacks Consensus Estimate of a loss of 4 cents. The company reported a loss of 18 cents in the prior-year quarter. On a GAAP basis, the company reported a loss per share of 24 cents compared with a loss of 58 cents in the year-ago quarter.

Quarterly revenues increased 8.4% year over year to $281.5 million. The figure came above the company’s guidance of $250 million to $280 million. The Zacks Consensus Estimate for the top line was pegged at $264.9 million.

Management highlighted that the first half of fiscal 2026 marked a key turning point as the company returned to growth, driven by strong execution across products, software, marketing and expansion in growth markets. This led to second-quarter revenue growth — the first positive second-quarter adjusted EBITDA in four years, and a third consecutive period of improving revenue trends. Second-quarter performance exceeded expectations, with revenue near the high end of guidance and adjusted EBITDA above the midpoint, while first-half adjusted EBITDA rose 48% year over year, supported by higher gross profit and lower operating expenses, reflecting continued disciplined execution.

Revenue Details

Revenues from Sonos speakers were $210 million, up 8% year over year.

Sonos’ system products’ revenues of $52.4 million increased 3.7%.

Revenues from Partner products and other totaled $19.1 million, up 29.9% year over year.

Region-wise, revenues from the Americas of $180.6 million increased 2.2% year over year. Europe, the Middle East and Africa generated revenues of $83.2 million, up 20.9%. Revenues from the Asia Pacific increased 25.3% to $17.8 million.

Margin Performance

Non-GAAP gross profit was $129.6 million, up 6% on a year-over-year basis.

Non-GAAP gross margin contracted 110 basis points (bps) to 46%.

Adjusted operating expenses amounted to $136.5 million, up 1.1% year over year.

Non-GAAP research and development (R&D) expenses increased 2.1%. Non-GAAP general and administrative (G&A) expenses were down 2.3%. Non GAAP sales and marketing expenses increased 1.3%.

Non-GAAP adjusted EBITDA totaled $1.7 million. The company’s second-quarter adjusted EBITDA was anticipated in the range from a loss of $18 million to a profit of $10 million.

Cash Flow & Liquidity

In the fiscal second quarter, Sonos used $65.4 million of cash from operations.

Free cash flow used was $70.2 million, up from $65.2 million used in the same period last year.

As of March 28, cash and cash equivalents were $200.2 million compared with $312.5 million as of Dec. 27, 2026. SONO has no debt.

In the second quarter, the company spent $40 million on share repurchases. Sonos still has $65 million remaining under its current share repurchase authorization.

Guidance

For the third quarter of fiscal 2026, the company expects revenue in the range of $355 million to $375 million, indicating year-over-year growth of 3% to 9%, with 6% growth at the midpoint. This guidance implies a modest acceleration from the second quarter on a constant-currency basis, as foreign exchange is expected to have a negligible impact on third-quarter growth. The company also noted that there will be no revenue contribution from App Multi during the quarter, as its launch is planned for the fall. Momentum is expected to continue into the fourth quarter, supporting a stronger second-half performance and full-year growth in line with prior expectations.

Gross margin for the third quarter is projected to be between 42% and 44.5% on a GAAP basis, with non-GAAP gross margin approximately 150 basis points higher, both remaining roughly flat year over year at the midpoint. The company stated that rising memory cost inflation is expected to continue into the fourth quarter, likely putting further pressure on gross margins. As a result, second-half fiscal 2026 gross margins, both GAAP and non-GAAP, are expected to be somewhat lower than those recorded in the second half of fiscal 2025.

Management emphasized ongoing mitigation efforts to address these industry headwinds while maintaining focus on driving revenue growth and profitability.

Operating expenses for the third quarter are projected to be between $150 million and $160 million on a GAAP basis, with non-GAAP operating expenses approximately $18 million lower and roughly flat sequentially at the midpoint. The company expects adjusted EBITDA in the range of $20 million to $48 million, translating to a margin of 5.6% to 12.7%.

The company remains focused on achieving sustainable revenue growth alongside improved profitability and disciplined reinvestment, with early benefits emerging from the adoption of AI to enhance productivity across multiple functions.

How Have Estimates Been Moving Since Then?Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM ScoresCurrently, Sonos has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook Sonos has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.