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Sonos Reports First Quarter Fiscal 2025 Results

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Sonos (SONO) reported Q1 fiscal 2025 results with revenue of $551 million, near the high-end of guidance. The company achieved GAAP gross margin of 43.8% and GAAP net income of $50.2 million ($0.40 per share). Non-GAAP net income was $79.2 million ($0.64 per share), with Adjusted EBITDA of $91.2 million.

The company announced a significant reorganization, including a reduction in force affecting approximately 12% of employees. This restructuring is expected to result in charges of $15-18 million, primarily related to severance and benefits costs, to be incurred in Q2 fiscal 2025.

Revenue breakdown shows Sonos speakers generated $467.1 million, system products $60.3 million, and partner products $23.4 million. Geographically, Americas contributed $324.6 million, EMEA $197.6 million, and Asia Pacific $28.7 million.

Sonos (SONO) ha riportato i risultati del primo trimestre fiscale 2025 con un fatturato di 551 milioni di dollari, vicino al limite superiore delle previsioni. L'azienda ha raggiunto un margine lordo GAAP del 43,8% e un utile netto GAAP di 50,2 milioni di dollari (0,40 dollari per azione). L'utile netto non-GAAP è stato di 79,2 milioni di dollari (0,64 dollari per azione), con un EBITDA rettificato di 91,2 milioni di dollari.

L'azienda ha annunciato una significativa riorganizzazione, inclusa una riduzione di personale che colpirà circa il 12% dei dipendenti. Questa ristrutturazione dovrebbe comportare costi tra 15 e 18 milioni di dollari, principalmente legati ai costi di liquidazione e benefici, che verranno sostenuti nel secondo trimestre fiscale 2025.

La suddivisione del fatturato mostra che gli altoparlanti Sonos hanno generato 467,1 milioni di dollari, i prodotti di sistema 60,3 milioni di dollari e i prodotti partner 23,4 milioni di dollari. Geograficamente, le Americhe hanno contribuito con 324,6 milioni di dollari, l'EMEA con 197,6 milioni di dollari e l'Asia-Pacifico con 28,7 milioni di dollari.

Sonos (SONO) informó los resultados del primer trimestre fiscal 2025 con ingresos de $551 millones, cerca del extremo superior de la guía. La compañía logró un margen bruto GAAP del 43.8% y un ingreso neto GAAP de $50.2 millones ($0.40 por acción). El ingreso neto no-GAAP fue de $79.2 millones ($0.64 por acción), con un EBITDA ajustado de $91.2 millones.

La empresa anunció una reestructuración significativa, que incluye una reducción de personal que afectará aproximadamente al 12% de los empleados. Se espera que esta reestructuración resulte en cargos de $15 a $18 millones, principalmente relacionados con costos de despido y beneficios, que se incurrirán en el segundo trimestre fiscal 2025.

El desglose de los ingresos muestra que los altavoces Sonos generaron $467.1 millones, los productos de sistema $60.3 millones y los productos de socios $23.4 millones. Geográficamente, las Américas contribuyeron con $324.6 millones, EMEA con $197.6 millones, y Asia-Pacífico con $28.7 millones.

Sonos (SONO)는 2025 회계연도 1분기 실적을 보고하며 매출이 5억 5,100만 달러로 가이드의 상위 범위에 근접했다고 발표했습니다. 회사는 GAAP 총 이익률 43.8%와 GAAP 순이익 5,020만 달러($0.40 주당)를 달성했습니다. 비GAAP 순이익은 7,920만 달러($0.64 주당)였으며, 조정된 EBITDA는 9,120만 달러였습니다.

회사는 약 12%의 직원에 영향을 미치는 인원 감축을 포함한 중대한 조직 개편을 발표했습니다. 이번 구조 조정에 따라 해고 및 복리후생 비용과 관련된 1,500만에서 1,800만 달러의 비용이 발생할 것으로 예상되며, 이는 2025 회계연도 2분기에 발생할 예정입니다.

매출 breakdown에 따르면, Sonos 스피커는 4억 6,710만 달러, 시스템 제품은 6,030만 달러, 파트너 제품은 2,340만 달러를 생성했습니다. 지리적으로는 아메리카가 3억 2,460만 달러, EMEA가 1억 9,760만 달러, 아시아 태평양이 2,870만 달러를 기여했습니다.

Sonos (SONO) a publié les résultats du premier trimestre de l'exercice fiscal 2025 avec un chiffre d'affaires de 551 millions de dollars, proche de l'extrémité supérieure des prévisions. L'entreprise a atteint une marge brute GAAP de 43,8 % et un bénéfice net GAAP de 50,2 millions de dollars (0,40 dollar par action). Le bénéfice net non-GAAP s'élevait à 79,2 millions de dollars (0,64 dollar par action), avec un EBITDA ajusté de 91,2 millions de dollars.

L'entreprise a annoncé une réorganisation significative, incluant une réduction de personnel touchant environ 12 % des employés. Cette restructuration devrait entraîner des charges de 15 à 18 millions de dollars, principalement liées aux coûts de licenciement et aux avantages, à engager au deuxième trimestre de l'exercice fiscal 2025.

La répartition des revenus montre que les haut-parleurs Sonos ont généré 467,1 millions de dollars, les produits système 60,3 millions de dollars, et les produits partenaires 23,4 millions de dollars. Géo-régionnellement, les Amériques ont contribué avec 324,6 millions de dollars, EMEA avec 197,6 millions de dollars, et l'Asie-Pacifique avec 28,7 millions de dollars.

Sonos (SONO) hat die Ergebnisse des ersten Quartals des Geschäftsjahres 2025 mit einem Umsatz von 551 Millionen Dollar gemeldet, was nahe am oberen Ende der Prognose liegt. Das Unternehmen erreichte eine GAAP-Bruttomarge von 43,8 % und einen GAAP-Nettoeinkommen von 50,2 Millionen Dollar (0,40 Dollar pro Aktie). Das Non-GAAP-Nettoeinkommen betrug 79,2 Millionen Dollar (0,64 Dollar pro Aktie), mit einem bereinigten EBITDA von 91,2 Millionen Dollar.

Das Unternehmen kündigte eine erhebliche Reorganisation an, einschließlich einer Reduzierung des Personals, die etwa 12 % der Mitarbeiter betrifft. Diese Umstrukturierung wird voraussichtlich zu Kosten von 15 bis 18 Millionen Dollar führen, die hauptsächlich mit Abfindungen und Sozialleistungen zusammenhängen, und die im zweiten Quartal des Geschäftsjahres 2025 anfallen werden.

Die Umsatzaufteilung zeigt, dass Sonos-Lautsprecher 467,1 Millionen Dollar, Systemprodukte 60,3 Millionen Dollar und Partnerprodukte 23,4 Millionen Dollar generierten. Geografisch trugen die Americas 324,6 Millionen Dollar, EMEA 197,6 Millionen Dollar und Asien-Pazifik 28,7 Millionen Dollar bei.

Positive
  • Revenue of $551 million near high-end of guidance
  • GAAP net income of $50.2 million
  • Strong gross margin of 43.8%
  • Positive free cash flow of $143.1 million
Negative
  • Year-over-year revenue decline from $612.9M to $550.9M
  • 12% workforce reduction with $15-18M in restructuring charges
  • Decreased Adjusted EBITDA margin from 18.8% to 16.6%
  • Lower net income compared to prior year ($50.2M vs $80.9M)

Insights

The Q1 results reveal a company actively restructuring for improved operational efficiency despite challenging market conditions. While revenue declined 10.1% year-over-year, several positive indicators emerge: inventory levels decreased significantly from $231.5 million to $140.9 million, demonstrating improved supply chain management and working capital efficiency.

The reduction in workforce, while substantial at 12%, appears strategically timed following the holiday season and aligns with broader tech industry efficiency initiatives. The estimated $15-18 million in restructuring charges should be offset by longer-term cost savings.

Regional performance shows interesting dynamics: while Americas revenue declined 17.3%, EMEA demonstrated resilience with slight growth to $197.6 million. This geographic diversification provides some buffer against regional market fluctuations. The company's cash position strengthened considerably, with cash and cash equivalents increasing to $280 million from $169.7 million at the end of Q4, providing ample liquidity for strategic initiatives.

The maintenance of a healthy gross margin at 43.8% despite revenue pressures indicates strong pricing power and cost control. The non-GAAP net income of $79.2 million and robust free cash flow generation of $143.1 million suggest underlying business strength despite top-line challenges.

Q1 revenue near high-end of guidance range, announced reduction in force

SANTA BARBARA, Calif.--(BUSINESS WIRE)-- Sonos, Inc. (Nasdaq: SONO) today reported First Quarter Fiscal 2025 results.

“Yesterday we implemented important organizational changes that mark the start of a new chapter of efficiency and growth for Sonos,” said Tom Conrad, Sonos Interim CEO. “I see tremendous opportunity in front of us. The team and I are hard at work improving the core experience for our customers while designing the next set of Sonos products and innovations. It’s an honor to show up every day to do this work with the talented Sonos team.”

“Our Q1 results show our team’s commitment to execution as we navigate a difficult environment,” commented Saori Casey, Sonos Chief Financial Officer. “We continue to make great progress in our transformation journey that will set us up well for the future.”

First Quarter Fiscal 2025 Financial Highlights (unaudited)

  • Revenue of $551 million
  • GAAP gross margin of 43.8%
  • GAAP net income of $50.2 million, GAAP diluted earnings per share (EPS) of $0.40
  • Non-GAAP net income1 of $79.2 million, Non-GAAP diluted EPS1 of $0.64
  • Adjusted EBITDA1 of $91.2 million

Notes:

(1) Non-GAAP net income/Non-GAAP diluted earnings per share (EPS) and Adjusted EBITDA exclude stock-based compensation, legal and transaction related fees, amortization of intangibles, and restructuring and abandonment costs. See “Use of Non-GAAP Measures” and reconciliations to GAAP measures below.

Reorganization and Reduction in Force

  • The company announced a reorganization and reduction in force involving approximately 12% of its employees in a Form 8-K filed with the SEC on February 5, 2025
  • The company estimates that it will incur approximately $15 to $18 million of restructuring and related charges, substantially all of which are related to employee severance and benefits costs. The company expects to incur substantially all of the restructuring and related charges in the second quarter of fiscal 2025

Guidance

The company will provide guidance on its First Quarter Fiscal 2025 earnings call.

Supplemental Earnings Presentation

The company has posted a supplemental earnings presentation accompanying its First Quarter Fiscal 2025 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 First Quarter Fiscal 2025 results on February 6, 2025, at 4:15 p.m. Eastern Time (1:15 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.

Consolidated Statements of Operations and Comprehensive Income

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

 

 

 

 

 

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

Revenue

 

$

550,857

 

 

$

612,869

 

Cost of revenue

 

 

309,451

 

 

 

330,190

 

Gross profit

 

 

241,406

 

 

 

282,679

 

Operating expenses

 

 

 

 

Research and development

 

 

80,838

 

 

 

79,235

 

Sales and marketing

 

 

86,644

 

 

 

83,950

 

General and administrative

 

 

25,831

 

 

 

39,799

 

Total operating expenses

 

 

193,313

 

 

 

202,984

 

Operating income

 

 

48,093

 

 

 

79,695

 

Other income (expense), net

 

 

 

 

Interest income

 

 

1,861

 

 

 

3,075

 

Interest expense

 

 

(110

)

 

 

(105

)

Other (expense) income, net

 

 

(6,029

)

 

 

10,274

 

Total other (expense) income, net

 

 

(4,278

)

 

 

13,244

 

Income before (benefit from) provision for income taxes

 

 

43,815

 

 

 

92,939

 

(Benefit from) provision for income taxes

 

 

(6,422

)

 

 

11,992

 

Net income

 

$

50,237

 

 

$

80,947

 

 

 

 

 

 

Net income attributable to common stockholders:

 

 

 

 

Basic and diluted

 

$

50,237

 

 

$

80,947

 

 

 

 

 

 

Net income per share attributable to common stockholders:

 

 

 

 

Basic

 

$

0.41

 

 

$

0.65

 

Diluted

 

$

0.40

 

 

$

0.64

 

 

 

 

 

 

Weighted-average shares used in computing net income per share attributable to common stockholders:

 

 

 

 

Basic

 

 

122,071,586

 

 

 

125,181,717

 

Diluted

 

 

124,731,619

 

 

 

126,742,153

 

 

 

 

 

 

Total comprehensive income

 

 

 

 

Net income

 

 

50,237

 

 

 

80,947

 

Change in foreign currency translation adjustment

 

 

(1,116

)

 

 

(863

)

Net unrealized gain on marketable securities

 

 

(84

)

 

 

 

Comprehensive income

 

$

49,037

 

 

$

80,084

 

Consolidated Balance Sheets

(unaudited, in thousands, except par values)

 

 

As of

 

 

December 28,

2024

 

September 28,

2024

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

279,955

 

 

$

169,732

 

Marketable securities

 

 

47,902

 

 

 

51,426

 

Accounts receivable, net

 

 

84,786

 

 

 

44,513

 

Inventories

 

 

140,892

 

 

 

231,505

 

Prepaids and other current assets

 

 

58,991

 

 

 

53,910

 

Total current assets

 

 

612,526

 

 

 

551,086

 

Property and equipment, net

 

 

95,028

 

 

 

102,148

 

Operating lease right-of-use assets

 

 

47,935

 

 

 

50,175

 

Goodwill

 

 

82,854

 

 

 

82,854

 

Intangible assets, net

 

 

 

 

In-process research and development

 

 

 

 

 

73,770

 

Other intangible assets

 

 

84,488

 

 

 

14,266

 

Deferred tax assets

 

 

9,654

 

 

 

10,314

 

Other noncurrent assets

 

 

31,120

 

 

 

31,699

 

Total assets

 

$

963,605

 

 

$

916,312

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

162,080

 

 

$

194,590

 

Accrued expenses

 

 

108,871

 

 

 

87,783

 

Accrued compensation

 

 

28,509

 

 

 

15,701

 

Deferred revenue, current

 

 

20,973

 

 

 

21,802

 

Other current liabilities

 

 

52,081

 

 

 

46,277

 

Total current liabilities

 

 

372,514

 

 

 

366,153

 

Operating lease liabilities, noncurrent

 

 

56,786

 

 

 

56,588

 

Deferred revenue, noncurrent

 

 

61,245

 

 

 

61,075

 

Deferred tax liabilities

 

 

176

 

 

 

60

 

Other noncurrent liabilities

 

 

3,757

 

 

 

3,816

 

Total liabilities

 

 

494,478

 

 

 

487,692

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

Stockholders’ equity:

 

 

 

 

Common stock, $0.001 par value

 

 

125

 

 

 

123

 

Treasury stock

 

 

(48,504

)

 

 

(17,096

)

Additional paid-in capital

 

 

521,121

 

 

 

498,245

 

Accumulated deficit

 

 

(697

)

 

 

(50,934

)

Accumulated other comprehensive loss

 

 

(2,918

)

 

 

(1,718

)

Total stockholders’ equity

 

 

469,127

 

 

 

428,620

 

Total liabilities and stockholders’ equity

 

$

963,605

 

 

$

916,312

 

Consolidated Statements of Cash Flows

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

Cash flows from operating activities

 

 

 

 

Net income

 

$

50,237

 

 

$

80,947

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Stock-based compensation expense

 

 

25,334

 

 

 

19,358

 

Depreciation and amortization

 

 

17,611

 

 

 

11,878

 

Provision for inventory obsolescence

 

 

1,305

 

 

 

5,837

 

Restructuring and abandonment charges

 

 

 

 

 

260

 

Deferred income taxes

 

 

123

 

 

 

(45

)

Other

 

 

841

 

 

 

1,236

 

Foreign currency transaction loss (gain)

 

 

2,129

 

 

 

(7,388

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

(41,374

)

 

 

(12,215

)

Inventories

 

 

89,308

 

 

 

167,641

 

Other assets

 

 

(6,437

)

 

 

(12,878

)

Accounts payable and accrued expenses

 

 

(5,940

)

 

 

(7,429

)

Accrued compensation

 

 

12,394

 

 

 

5,988

 

Deferred revenue

 

 

1,513

 

 

 

3,660

 

Other liabilities

 

 

9,129

 

 

 

18,551

 

Net cash provided by operating activities

 

 

156,173

 

 

 

275,401

 

Cash flows from investing activities

 

 

 

 

Purchases of marketable securities

 

 

(10,128

)

 

 

 

Purchases of property and equipment

 

 

(13,106

)

 

 

(6,077

)

Maturities of marketable securities

 

 

13,900

 

 

 

 

Net cash used in investing activities

 

 

(9,334

)

 

 

(6,077

)

Cash flows from financing activities

 

 

 

 

Payments for repurchase of common stock, including excise tax and commission

 

 

(27,165

)

 

 

(23,484

)

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

 

 

(9,044

)

 

 

(3,745

)

Proceeds from exercise of stock options

 

 

2,411

 

 

 

3,538

 

Net cash used in financing activities

 

 

(33,798

)

 

 

(23,691

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(2,818

)

 

 

1,478

 

Net increase in cash and cash equivalents

 

 

110,223

 

 

 

247,111

 

Cash and cash equivalents

 

 

 

 

Beginning of period

 

 

169,732

 

 

 

220,231

 

End of period

 

$

279,955

 

 

$

467,342

 

Supplemental disclosure

 

 

 

 

Cash paid for interest

 

$

63

 

 

$

58

 

Cash paid for taxes, net of refunds

 

$

658

 

 

$

3,684

 

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

 

$

(2,531

)

 

$

2,601

 

Supplemental disclosure of non-cash investing and financing activities

 

 

 

 

Purchases of property and equipment in accounts payable and accrued expenses

 

$

3,693

 

 

$

6,141

 

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

 

$

 

 

$

7,637

 

Excise tax on share repurchases, accrued but not paid

 

$

668

 

 

$

 

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

(unaudited, in thousands, except percentages)

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

Reconciliation of GAAP cost of revenue

 

 

 

 

GAAP cost of revenue

 

$

309,451

 

 

$

330,190

 

Stock-based compensation expense

 

 

1,349

 

 

 

654

 

Amortization of intangibles

 

 

3,330

 

 

 

972

 

Non-GAAP cost of revenue

 

$

304,772

 

 

$

328,564

 

 

 

 

 

 

Reconciliation of GAAP gross profit

 

 

 

 

GAAP gross profit

 

$

241,406

 

 

$

282,679

 

Stock-based compensation expense

 

 

1,349

 

 

 

654

 

Amortization of intangibles

 

 

3,330

 

 

 

972

 

Non-GAAP gross profit

 

$

246,085

 

 

$

284,305

 

 

 

 

 

 

GAAP gross margin

 

 

43.8

%

 

 

46.1

%

Non-GAAP gross margin

 

 

44.7

%

 

 

46.4

%

Reconciliation of Selected Non-GAAP Financial Measures

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

GAAP Research and Development

 

$

80,838

 

 

$

79,235

Stock-based compensation

 

 

13,315

 

 

 

8,979

Amortization of intangibles

 

 

178

 

 

 

496

Restructuring and abandonment costs

 

 

(60

)

 

 

323

Non-GAAP Research and Development

 

$

67,405

 

 

$

69,437

 

 

 

 

 

GAAP Sales and Marketing

 

$

86,644

 

 

$

83,950

Stock-based compensation

 

 

5,632

 

 

 

3,815

Amortization of intangibles

 

 

-

 

 

 

-

Restructuring and abandonment costs

 

 

-

 

 

 

113

Non-GAAP Sales and Marketing

 

$

81,012

 

 

$

80,022

 

 

 

 

 

GAAP General and Administrative

 

 

25,831

 

 

 

39,799

Stock-based compensation

 

 

5,038

 

 

 

5,910

Legal and transaction related costs

 

 

195

 

 

 

3,743

Amortization of intangibles

 

 

23

 

 

 

24

Restructuring and abandonment costs

 

 

-

 

 

 

132

Non-GAAP General and Administrative

 

$

20,575

 

 

$

29,990

 

 

 

 

 

GAAP Operating Expenses

 

$

193,313

 

 

$

202,984

Stock-based compensation

 

 

23,985

 

 

 

18,704

Legal and transaction related costs

 

 

195

 

 

 

3,743

Amortization of intangibles

 

 

201

 

 

 

520

Restructuring and abandonment costs

 

 

(60

)

 

 

568

Non-GAAP Operating Expenses

 

$

168,992

 

 

$

179,449

 

 

 

 

 

GAAP Operating Income

 

$

48,093

 

 

$

79,695

Stock-based compensation

 

 

25,334

 

 

 

19,358

Legal and transaction related costs

 

 

195

 

 

 

3,743

Amortization of intangibles

 

 

3,531

 

 

 

1,492

Restructuring and abandonment costs

 

 

(60

)

 

 

568

Non-GAAP Operating Income

 

$

77,093

 

 

$

104,856

Depreciation

 

 

14,080

 

 

 

10,386

Adjusted EBITDA (Non-GAAP)

 

$

91,173

 

 

$

115,242

Reconciliation of Net Income to Adjusted EBITDA

(unaudited, dollars in thousands except percentages)

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

(In thousands, except percentages)

 

 

 

 

Net income

 

$

50,237

 

 

$

80,947

 

Add (deduct):

 

 

 

 

Depreciation and amortization

 

 

17,611

 

 

 

11,878

 

Stock-based compensation expense

 

 

25,334

 

 

 

19,358

 

Interest income

 

 

(1,861

)

 

 

(3,075

)

Interest expense

 

 

110

 

 

 

105

 

Other expense (income), net

 

 

6,029

 

 

 

(10,274

)

(Benefit from) provision for income taxes

 

 

(6,422

)

 

 

11,992

 

Legal and transaction related costs (1)

 

 

195

 

 

 

3,743

 

Restructuring and abandonment costs (2)

 

 

(60

)

 

 

568

 

Adjusted EBITDA

 

$

91,173

 

 

$

115,242

 

Revenue

 

$

550,857

 

 

$

612,869

 

Net income margin

 

 

9.1

%

 

 

13.2

%

Adjusted EBITDA margin

 

 

16.6

%

 

 

18.8

%

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

(2) On August 14, 2024, we initiated a restructuring plan to reduce our cost base involving approximately 6% of our employees (the "2024 restructuring plan"). Substantially all restructuring related costs were incurred in the fourth quarter of fiscal 2024. In the first quarter of fiscal 2025, we recorded a gain resulting from the impact of remaining restructuring costs that were lower than our estimated liability. The gain was recognized as a credit in research and development expenses on the condensed consolidated statements of operations and comprehensive income. For fiscal 2024, restructuring and abandonment costs also include nominal remaining costs incurred related to the restructuring plan incurred on June 14, 2023.

Reconciliation of GAAP Net Income to Non-GAAP Net Income

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

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

Reconciliation of GAAP net income

 

 

 

 

GAAP net income

 

$

50,237

 

 

$

80,947

Stock-based compensation expense

 

 

25,334

 

 

 

19,358

Legal and transaction related costs

 

 

195

 

 

 

3,743

Amortization of intangibles

 

 

3,531

 

 

 

1,492

Restructuring and abandonment costs

 

 

(60

)

 

 

568

Non-GAAP net income

 

$

79,237

 

 

$

106,108

 

 

 

 

 

Net income per share

 

 

 

 

GAAP net income per share, diluted

 

$

0.40

 

 

$

0.64

Non-GAAP net income per share, diluted

 

$

0.64

 

 

$

0.84

 

 

 

 

 

Shares used to calculate net income per share

 

 

 

 

Weighted-average shares GAAP, diluted

 

 

124,731,619

 

 

 

126,742,153

Weighted-average shares non-GAAP, diluted

 

 

124,731,619

 

 

 

126,742,153

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

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

Cash flows provided by operating activities

 

$

156,173

 

 

$

275,401

 

Less: Purchases of property and equipment

 

 

(13,106

)

 

 

(6,077

)

Free cash flow

 

$

143,067

 

 

$

269,324

 

Revenue by Product Category

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

(In thousands)

 

 

 

 

Sonos speakers

 

$

467,142

 

$

503,011

Sonos system products

 

 

60,274

 

 

84,562

Partner products and other revenue

 

 

23,441

 

 

25,296

Total revenue

 

$

550,857

 

$

612,869

Revenue by Geographical Region

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

Americas

 

$

324,583

 

$

392,439

Europe, Middle East and Africa

 

 

197,612

 

 

191,817

Asia Pacific

 

 

28,662

 

 

28,613

Total revenue

 

$

550,857

 

$

612,869

Stock-based Compensation

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

(In thousands)

 

 

 

 

Cost of revenue

 

$

1,349

 

$

654

Research and development

 

 

13,315

 

 

8,979

Sales and marketing

 

 

5,632

 

 

3,815

General and administrative

 

 

5,038

 

 

5,910

Total stock-based compensation expense

 

$

25,334

 

$

19,358

Amortization of Intangibles

(unaudited, dollars in thousands)

 

 

Three Months Ended

 

 

December 28,

2024

 

December 30,

2023

Cost of revenue

 

$

3,330

 

$

972

Research and development

 

 

178

 

 

496

Sales and marketing

 

 

-

 

 

-

General and administrative

 

 

23

 

 

24

Total amortization of intangibles

 

$

3,531

 

$

1,492

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, free cash flow, non-GAAP gross margin, net income excluding stock-based compensation, legal and transaction related fees, amortization of intangibles, and restructuring and abandonment costs and diluted earnings per share excluding stock-based compensation, legal and transaction related fees, amortization of intangibles and restructuring and abandonment costs. 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 income adjusted to exclude the impact of depreciation and amortization, stock-based compensation expense, interest income, interest expense, other income, income taxes, restructuring and abandonment costs, 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 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 and amortization of intangible assets. We calculate non-GAAP net income excluding stock-based compensation, legal and transaction related fees, amortization of intangibles and restructuring and abandonment costs as net income less stock-based compensation, legal and transaction related fees, amortization of intangibles and restructuring and abandonment costs. We calculate non-GAAP diluted earnings per share excluding stock-based compensation, legal and transaction related fees, amortization of intangibles and restructuring and abandonment costs as net income less stock-based compensation, legal and transaction related fees, amortization of intangibles and restructuring and abandonment costs divided by our number of shares at fiscal year end. 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, our product roadmap, market growth and our market share, our ability to expand our footprint with existing customers, our operating model and cost structure, our expectations with respect to restructuring and related charges and the timing and amounts of such charges, 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 introduce software updates to our new app on a timely basis and otherwise deliver on our action plan to address issues caused by our new app and related customer commitments; our ability to maintain, enhance and protect our brand image; the impact of global economic, market and political events, including 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; 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; 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 one of the world’s leading sound experience brands. As the inventor of multi-room wireless home audio, Sonos’ innovation helps the world listen better by giving people access to the content they love and allowing them to control it however they choose. Known for delivering an unparalleled sound experience, thoughtful home design aesthetic, simplicity of use and an open platform, Sonos makes the breadth of audio content available to anyone. Sonos is headquartered in Santa Barbara, California. Learn more at www.sonos.com.

Investor Contact

James Baglanis

IR@sonos.com

Press Contact

Erin Pategas

PR@sonos.com

Source: Sonos

FAQ

What was Sonos (SONO) revenue in Q1 2025?

Sonos reported revenue of $551 million in Q1 fiscal 2025, which was near the high-end of their guidance range.

How many employees will be affected by SONO's 2025 restructuring?

Sonos announced a reduction in force affecting approximately 12% of its employees in February 2025.

What is the expected cost of SONO's 2025 restructuring?

Sonos estimates restructuring charges of $15-18 million, primarily for employee severance and benefits costs, to be incurred in Q2 fiscal 2025.

What was Sonos (SONO) earnings per share in Q1 2025?

Sonos reported GAAP earnings per share of $0.40 and Non-GAAP earnings per share of $0.64 in Q1 fiscal 2025.

How much revenue did SONO generate from speakers in Q1 2025?

Sonos speakers generated revenue of $467.1 million in Q1 fiscal 2025.

Sonos, Inc.

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Consumer Electronics
Household Audio & Video Equipment
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United States
SANTA BARBARA