Sonos Q1 EPS Tops Estimates; Revenue Near Guidance at $545.7M
Sonos reported Q1 non-GAAP EPS of $0.93 and GAAP EPS of $0.75 while revenue fell 0.9% to $545.7 million, near the high end of guidance. Non-GAAP gross margin rose 280 bps to 47.5%, free cash flow reached $157.4 million, and $25 million in share repurchases left $105 million available.
1. Q1 Financial Highlights
Sonos delivered non-GAAP EPS of $0.93, exceeding the consensus of $0.81, and GAAP EPS of $0.75 compared to $0.40 a year ago. Quarterly revenue was $545.7 million, down 0.9% year over year but near the high end of the company’s $510 million to $560 million guidance range.
2. Revenue and Product Segment Performance
Speaker revenues declined 1.7% to $459.2 million while system products rose 7.9% to $65.1 million. Partner products and other revenues fell 8.9% to $21.4 million, and regional sales grew 1.3% in the Americas but fell 4.1% in EMEA and 4.6% in Asia Pacific.
3. Margin and Cash Flow
Non-GAAP gross profit increased 5.3% to $259.2 million, expanding margin by 280 basis points to 47.5%, and adjusted EBITDA reached $132.1 million, near the top of guidance. Sonos generated $157.4 million in free cash flow, held $312.5 million in cash, and executed $25 million in share repurchases under its authorization.
4. Q2 Guidance and Outlook
Sonos forecasts Q2 revenue of $250 million to $280 million, implying year-over-year growth of 2% at the midpoint, with GAAP gross margin of 44% to 46% and adjusted EBITDA between a loss of $18 million and a profit of $10 million. Recent downward estimate revisions signal cautious investor sentiment ahead of the next earnings release.