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Sonos' (SONO) Q3 Earnings & Revenues Top Estimates, Up Y/Y
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Sonos, Inc. (SONO - Free Report) reported third-quarter fiscal 2024 non-GAAP earnings per share of 23 cents. It had registered earnings per share of 16 cents in the prior-year quarter. On a GAAP basis, the company reported earnings of 3 cents against a loss of 18 cents in the year-ago quarter. The Zacks Consensus Estimate was pegged at 19 cents.
Quarterly revenues increased 6% year over year to $397.1 million, primarily benefiting from the launch of SONO’s first over-the-ear Bluetooth headphone, Sonos Ace, earlier this quarter. The top line surpassed the Zacks Consensus Estimate by 1%.
Sonos launched a major app redesign in April 2024 to enhance the streaming experience, but the execution fell short. Undetected bugs surfaced during the rollout, leading to a less satisfactory experience for many customers. This incident also delayed the two major new product releases planned for the fiscal fourth quarter.
Revenues from Sonos speakers were $301.1 million, up 3.9% year over year. The consensus estimate was pegged at $289 million.
Sonos system products’ revenues of $75.2 million rose 17.1% year over year. The consensus estimate was pegged at $57 million.
Revenues from Partner products and other totaled $20.9 million, up 7.5% year over year. The consensus estimate was pegged at $49.03 million.
Region-wise, revenues from the Americas of $264.6 million increased 5.2% year over year. Europe, the Middle East and Africa generated revenues of $110.9 million, up 5.3%. Revenues from the Asia Pacific rose 31.7% year over year to $21.6 million.
Other Details
Non-GAAP gross profit was $193.3 million, up 11.6% on a year-over-year basis. Non-GAAP gross margin expanded 230 basis points to 48.7%, resulting from improved inventory management.
Total operating expenses amounted to $179 million, down from $193 million in the year-ago quarter, reflecting lower research and development costs as well as general and administrative costs.
Non-GAAP adjusted operating income was $38.4 million compared with $23.6 million in the year-ago quarter. Adjusted EBITDA totaled $48.9 million compared with $34.3 million a year ago.
Cash Flow & Liquidity
For the fiscal third quarter, Sonos used $63.5 million of cash from operations. Free cash outflow was $40.3 million.
As of Jun 29, cash and cash equivalents were $227.1 million compared with $291.6 million as of Mar 30, 2024.
The company returned $52.5 million to shareholders through stock repurchases in the quarter. It has $71 million worth of shares left for repurchase under the current $200 million buyback authorization.
Guidance Updated
The company revised its fourth-quarter fiscal 2024 expectations due to challenges with its new app rollout. This impacted revenues in two ways: lower sales across the portfolio owing to app issues and the decision to delay two major product launches until the app meets expected quality standards.
Management expects fiscal fourth quarter revenues to be in the range of $240 million to $260 million. GAAP gross margin is projected to be in the band of 40% to 42%, down sequentially. Margin performance is expected to be affected by deleveraging arising from lower revenues. Adjusted EBITDA loss for the fiscal fourth quarter is likely to be in the range of $14 million to $ 37 million.
Revenues are expected to be in the band of $1.503 billion to $1.523 billion for the full year. GAAP gross profit is projected to be in the range of $682 million to $696 million, representing a gross margin of 45.4% to 45.7%.
Adjusted EBITDA is anticipated to be in the range of $93 million to $117 million for the fiscal year, representing a margin of 6.2% to 7.7%.
The Zacks Consensus Estimate for Arista’s 2024 EPS has increased 4% in the past 60 days to $8.24. The company’s second-quarter 2024 EPS of $2.10 beat the Zacks Consensus Estimate by 16 cents. Quarterly revenues were $1.69 billion, up 15.8% from $1.46 billion in the year-ago quarter and surpassed the consensus mark by $1.64 billion.
The Zacks Consensus Estimate for Generac’s 2024 EPS has increased 2.9% in the past 60 days to $6.44. The company’s second-quarter 2024 EPS of $1.35 topped the Zacks Consensus Estimate by 8.9%. Quarterly net sales were $998 million, down 22% from $1 billion in the year-ago quarter and missed the consensus mark by 0.5%.
The Zacks Consensus Estimate for Itron’s 2024 EPS has increased 12% in the past 60 days to $4.48. The company’s second-quarter 2024 EPS of $1.21 topped the Zacks Consensus Estimate by 26%. Revenues came in at $609 million, up 13% year-over-year and beat the Zacks Consensus Estimate of $600 million.
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Sonos' (SONO) Q3 Earnings & Revenues Top Estimates, Up Y/Y
Sonos, Inc. (SONO - Free Report) reported third-quarter fiscal 2024 non-GAAP earnings per share of 23 cents. It had registered earnings per share of 16 cents in the prior-year quarter. On a GAAP basis, the company reported earnings of 3 cents against a loss of 18 cents in the year-ago quarter. The Zacks Consensus Estimate was pegged at 19 cents.
Quarterly revenues increased 6% year over year to $397.1 million, primarily benefiting from the launch of SONO’s first over-the-ear Bluetooth headphone, Sonos Ace, earlier this quarter. The top line surpassed the Zacks Consensus Estimate by 1%.
Sonos launched a major app redesign in April 2024 to enhance the streaming experience, but the execution fell short. Undetected bugs surfaced during the rollout, leading to a less satisfactory experience for many customers. This incident also delayed the two major new product releases planned for the fiscal fourth quarter.
Sonos, Inc. Price, Consensus and EPS Surprise
Sonos, Inc. price-consensus-eps-surprise-chart | Sonos, Inc. Quote
Revenue Details
Revenues from Sonos speakers were $301.1 million, up 3.9% year over year. The consensus estimate was pegged at $289 million.
Sonos system products’ revenues of $75.2 million rose 17.1% year over year. The consensus estimate was pegged at $57 million.
Revenues from Partner products and other totaled $20.9 million, up 7.5% year over year. The consensus estimate was pegged at $49.03 million.
Region-wise, revenues from the Americas of $264.6 million increased 5.2% year over year. Europe, the Middle East and Africa generated revenues of $110.9 million, up 5.3%. Revenues from the Asia Pacific rose 31.7% year over year to $21.6 million.
Other Details
Non-GAAP gross profit was $193.3 million, up 11.6% on a year-over-year basis. Non-GAAP gross margin expanded 230 basis points to 48.7%, resulting from improved inventory management.
Total operating expenses amounted to $179 million, down from $193 million in the year-ago quarter, reflecting lower research and development costs as well as general and administrative costs.
Non-GAAP adjusted operating income was $38.4 million compared with $23.6 million in the year-ago quarter. Adjusted EBITDA totaled $48.9 million compared with $34.3 million a year ago.
Cash Flow & Liquidity
For the fiscal third quarter, Sonos used $63.5 million of cash from operations. Free cash outflow was $40.3 million.
As of Jun 29, cash and cash equivalents were $227.1 million compared with $291.6 million as of Mar 30, 2024.
The company returned $52.5 million to shareholders through stock repurchases in the quarter. It has $71 million worth of shares left for repurchase under the current $200 million buyback authorization.
Guidance Updated
The company revised its fourth-quarter fiscal 2024 expectations due to challenges with its new app rollout. This impacted revenues in two ways: lower sales across the portfolio owing to app issues and the decision to delay two major product launches until the app meets expected quality standards.
Management expects fiscal fourth quarter revenues to be in the range of $240 million to $260 million. GAAP gross margin is projected to be in the band of 40% to 42%, down sequentially.
Margin performance is expected to be affected by deleveraging arising from lower revenues.
Adjusted EBITDA loss for the fiscal fourth quarter is likely to be in the range of $14 million to $ 37 million.
Revenues are expected to be in the band of $1.503 billion to $1.523 billion for the full year.
GAAP gross profit is projected to be in the range of $682 million to $696 million, representing a gross margin of 45.4% to 45.7%.
Adjusted EBITDA is anticipated to be in the range of $93 million to $117 million for the fiscal year, representing a margin of 6.2% to 7.7%.
Zacks Rank and Stocks to Consider
Sonos currently carries a Zacks Rank #3 (Hold)
Some better-ranked stocks from the broader technology space are Itron, Inc. (ITRI - Free Report) , Generac Holdings Inc. (GNRC - Free Report) and Arista Networks, Inc. (ANET - Free Report) . ANET presently sports a Zacks Rank #1 (Strong Buy), whereas GNRC & ITRI both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista’s 2024 EPS has increased 4% in the past 60 days to $8.24. The company’s second-quarter 2024 EPS of $2.10 beat the Zacks Consensus Estimate by 16 cents. Quarterly revenues were $1.69 billion, up 15.8% from $1.46 billion in the year-ago quarter and surpassed the consensus mark by $1.64 billion.
The Zacks Consensus Estimate for Generac’s 2024 EPS has increased 2.9% in the past 60 days to $6.44. The company’s second-quarter 2024 EPS of $1.35 topped the Zacks Consensus Estimate by 8.9%. Quarterly net sales were $998 million, down 22% from $1 billion in the year-ago quarter and missed the consensus mark by 0.5%.
The Zacks Consensus Estimate for Itron’s 2024 EPS has increased 12% in the past 60 days to $4.48. The company’s second-quarter 2024 EPS of $1.21 topped the Zacks Consensus Estimate by 26%. Revenues came in at $609 million, up 13% year-over-year and beat the Zacks Consensus Estimate of $600 million.