Sonos reported first-quarter revenue of $360 million, flat year-over-year but exceeding consensus estimates by $10 million. Non-GAAP earnings per share came in at $0.22, topping the Street by $0.05. Gross margin expanded by 250 basis points to 50.3%, driven by higher ASPs on premium speaker lineups and improved supply-chain efficiency. The company also delivered $45 million in free cash flow, up from $5 million in the year-ago quarter, underscoring the strength of its core operations.

In a bid to shore up profitability, Sonos cut research and development spending by 30% year-over-year, reallocating resources toward marketing and new product commercialization. This move helped drive a 45% year-over-year increase in adjusted EBITDA, which rose to $43 million. Operating expenses declined to 30% of revenue, compared with 36% in Q1 of last year. Management noted that these savings will support a leaner cost structure even as R&D investments resume around strategic initiatives later in the year.

Looking ahead to the second half of fiscal 2026, Sonos plans to launch two new smart-speaker models and an updated wireless surround kit. Favorable year-over-year comparisons and incremental contribution from recently introduced headphones are expected to drive a return to low-single-digit revenue growth. The company reiterated its full-year non-GAAP operating margin target of 8%–10% and projects full-year free cash flow of $150 million, up from $90 million in fiscal 2025.