Sonos Reports First Quarter Fiscal 2026 Results

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

“Fiscal 2026 is off to a good start for Sonos as we make progress toward a return to growth,” said Tom Conrad, Chief Executive Officer of Sonos. “We’re focused on coordinated execution across the growth dimensions that matter, from product and software to marketing and global expansion. With the announcement of Amp Multi, and with more planned later this year, we’re returning to product innovation that strengthens Sonos as a system, pairing great products with a simpler, more reliable, and more powerful platform designed to create long-term value for our customers, partners, and the business – all while maintaining our commitment to operational discipline.”

“In Q1 we delivered revenue above the midpoint of our guidance range and strong Adjusted EBITDA that expanded 45% over the prior year, resulting in us generating more profit in Q1 than we did in all of Fiscal 2025,” commented Saori Casey, Sonos Chief Financial Officer. “This marks our sixth consecutive quarter of solid execution as we balance strong financial discipline with reinvestment for long-term growth.”

First Quarter Fiscal 2026 Financial Highlights (unaudited)

Guidance

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

Supplemental Earnings Presentation

The company has posted a supplemental earnings presentation accompanying its First 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 First Quarter Fiscal 2026 results on February 3, 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 Income

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

Three Months Ended

December 27,

2025

December 28,

2024

Revenue

545,662

550,857

Cost of revenue

292,202

309,451

Gross profit

253,460

241,406

Operating expenses

Research and development

59,762

80,838

Sales and marketing

65,273

86,644

General and administrative

28,009

25,831

Total operating expenses

153,044

193,313

Operating income

100,416

48,093

Other income (expense), net

Interest income

1,348

1,861

Interest expense

(116

)

(110

)

Other (expense) income, net

420

(6,029

)

Total other income (expense), net

1,652

(4,278

)

Income before provision for (benefit from) income taxes

102,068

43,815

Provision for (benefit from) income taxes

8,270

(6,422

)

Net income

93,798

50,237

Earnings per share:

Basic

0.78

0.41

Diluted

0.75

0.40

Weighted-average shares used in computing earnings per share:

Basic

120,489,548

122,071,586

Diluted

124,662,298

124,731,619

Total comprehensive income

Net income

93,798

50,237

Change in foreign currency translation adjustment

1,736

(1,116

)

Net unrealized gain (loss) on marketable securities

(84

)

Comprehensive income

95,550

49,037

Condensed Consolidated Balance Sheets

(unaudited, in thousands, except par values)

As of

December 27,

2025

September 27,

2025

Assets

Current assets:

Cash and cash equivalents

312,504

174,668

Marketable securities

50,987

52,858

Accounts receivable, net

116,270

65,847

Inventories

125,332

171,020

Prepaids and other current assets

35,146

39,642

Total current assets

640,239

504,035

Property and equipment, net

65,547

72,277

Operating lease right-of-use assets

44,721

45,297

Goodwill

82,854

Intangible assets, net

70,932

75,356

Deferred tax assets

10,545

10,509

Other noncurrent assets

33,037

32,950

Total assets

947,875

823,278

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

203,812

184,109

Accrued expenses

87,688

79,094

Accrued compensation

21,711

21,331

Deferred revenue, current

22,283

21,771

Other current liabilities

52,675

46,107

Total current liabilities

388,169

352,412

Operating lease liabilities, noncurrent

52,101

53,288

Deferred revenue, noncurrent

61,256

59,453

Deferred tax liabilities

129

126

Other noncurrent liabilities

2,894

2,774

Total liabilities

504,549

468,053

Commitments and contingencies

Stockholders’ equity:

Common stock, $0.001 par value

124

123

Treasury stock

(47,782

)

(37,398

)

Additional paid-in capital

505,709

502,775

Accumulated deficit

(18,280

)

(112,078

)

Accumulated other comprehensive income

3,555

1,803

Total stockholders’ equity

443,326

355,225

Total liabilities and stockholders’ equity

947,875

823,278

Condensed Consolidated Statements of Cash Flows

(unaudited, dollars in thousands)

Three Months Ended

December 27,

2025

December 28,

2024

Cash flows from operating activities

Net income

93,798

50,237

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

Stock-based compensation expense

15,191

25,334

Depreciation and amortization

14,022

17,611

Provision for excess and obsolete inventory

153

1,305

Deferred income taxes

123

Other

2,025

841

Foreign currency transaction (gain) loss

(1,625

)

2,129

Changes in operating assets and liabilities:

Accounts receivable

(49,120

)

(41,374

)

Inventories

45,534

89,308

Other assets

4,263

(6,437

)

Accounts payable and accrued expenses

31,224

(5,940

)

Accrued compensation

546

12,394

Deferred revenue

2,073

1,513

Other liabilities

5,175

9,129

Net cash provided by operating activities

163,307

156,173

Cash flows from investing activities

Purchases of marketable securities

(12,506

)

(10,128

)

Purchases of property and equipment

(5,958

)

(13,106

)

Maturities of marketable securities

14,400

13,900

Net cash used in investing activities

(4,064

)

(9,334

)

Cash flows from financing activities

Payments for repurchase of common stock

(25,000

)

(27,165

)

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

(10,873

)

(9,044

)

Proceeds from exercise of stock options

13,232

2,411

Payments for debt issuance costs

(780

)

—

Net cash used in financing activities

(23,421

)

(33,798

)

Effect of exchange rate changes on cash and cash equivalents

2,014

(2,818

)

Net increase in cash and cash equivalents

137,836

110,223

Cash and cash equivalents

Beginning of period

174,668

169,732

End of period

312,504

279,955

Supplemental disclosure

Cash paid for interest

Cash paid for taxes, net of refunds

1,469

658

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

1,899

(2,531

)

Supplemental disclosure of non-cash investing and financing activities

Purchases of property and equipment in accounts payable and accrued expenses

1,950

3,693

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

586

—

Excise tax on share repurchases, accrued but not paid

281

668

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

(unaudited, in thousands, except percentages)

Three Months Ended

December 27,

2025

December 28,

2024

Reconciliation of GAAP cost of revenue

GAAP cost of revenue

292,202

309,451

Stock-based compensation expense

1,327

1,349

Amortization of intangibles

4,381

3,330

Non-GAAP cost of revenue

286,494

304,772

Reconciliation of GAAP gross profit

GAAP gross profit

253,460

241,406

Stock-based compensation expense

1,327

1,349

Amortization of intangibles

4,381

3,330

Non-GAAP gross profit

259,168

246,085

GAAP gross margin

46.5

43.8

Non-GAAP gross margin

47.5

44.7

Reconciliation of Selected Non-GAAP Financial Measures

(unaudited, dollars in thousands)

Three Months Ended

December 27,

2025

December 28,

2024

Research and Development (GAAP)

59,762

80,838

Stock-based compensation

6,489

13,315

Amortization of intangibles

178

Restructuring and other charges

(60

)

Research and Development (Non-GAAP)

53,253

67,405

Sales and Marketing (GAAP)

65,273

86,644

Stock-based compensation

2,845

5,632

Amortization of intangibles

Restructuring and other charges

Sales and Marketing (Non-GAAP)

62,428

81,012

General and Administrative (GAAP)

28,009

25,831

Stock-based compensation

4,530

5,038

Legal and transaction related costs

2,510

195

Amortization of intangibles

Restructuring and other charges

General and Administrative (Non-GAAP)

20,945

20,575

Total Operating Expenses (GAAP)

153,044

193,313

Stock-based compensation

13,864

23,985

Legal and transaction related costs (1)

2,510

195

Amortization of intangibles

201

Restructuring and other charges

(60

)

Operating Expenses (Non-GAAP)

136,626

168,992

Total Operating Income (GAAP)

100,416

48,093

Stock-based compensation

15,191

25,334

Legal and transaction related costs (1)

2,510

195

Amortization of intangibles

4,425

3,531

Restructuring and other charges

(60

)

Operating Income (Non-GAAP)

122,542

77,093

Depreciation

9,597

14,080

Adjusted EBITDA (Non-GAAP)

132,139

91,173

Total Operating Income (GAAP)

100,416

48,093

Stock-based compensation expense

15,191

25,334

Legal and transaction related costs (1)

2,510

195

Amortization of intangibles

4,425

3,531

Restructuring and other charges

(60

)

Operating Income (Non-GAAP)

122,542

77,093

Interest income

1,348

1,861

Interest expense

(116

)

(110

)

Pre-tax Income (Non-GAAP)

123,774

78,844

Provision for (benefit from) income taxes

8,270

(6,422

)

Net income (Non-GAAP)

115,504

85,266

Weighted-average shares non-GAAP, diluted

124,662,298

124,731,619

Non-GAAP earnings per share, diluted

0.93

0.68

(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.

Reconciliation of Net Income to Adjusted EBITDA

(unaudited, dollars in thousands except percentages)

Three Months Ended

December 27,

2025

December 28,

2024

(In thousands, except percentages)

Net income

93,798

50,237

Add (deduct):

Depreciation and amortization

14,022

17,611

Stock-based compensation expense

15,191

25,334

Interest income

(1,348

)

(1,861

)

Interest expense

116

110

Other expense (income), net

(420

)

6,029

Provision for (benefit from) income taxes

8,270

(6,422

)

Legal and transaction related costs (1)

2,510

195

Restructuring and other charges (2)

—

(60

)

Adjusted EBITDA

132,139

91,173

Revenue

545,662

550,857

Net income margin

17.2

9.1

Adjusted EBITDA margin

24.2

16.6

(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"). Restructuring and other charges for the three months ended December 28, 2024, reflect a gain resulting from the impact of remaining restructuring costs that were lower than our estimated liability under the 2024 restructuring plan.

Reconciliation of GAAP Net Income to Non-GAAP Net Income

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

Three Months Ended

December 27,

2025

December 28,

2024

GAAP net income

93,798

50,237

Stock-based compensation expense

15,191

25,334

Legal and transaction related costs (1)

2,510

195

Amortization of intangibles

4,425

3,531

Restructuring and other charges

(60

)

Other expense (income), net

(420

)

6,029

Non-GAAP net income

115,504

85,266

Earnings per share

GAAP earnings per share, diluted

0.75

0.40

Non-GAAP earnings per share, diluted

0.93

0.68

Shares used to calculate earnings per share

Weighted-average shares GAAP, diluted

124,662,298

124,731,619

Weighted-average shares non-GAAP, diluted

124,662,298

124,731,619

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

(unaudited, dollars in thousands)

Three Months Ended

December 27,

2025

December 28,

2024

Cash flows provided by operating activities

163,307

156,173

Less: Purchases of property and equipment

(5,958

)

(13,106

)

Free cash flow

157,349

143,067

Revenue by Product Category

(unaudited, dollars in thousands)

Three Months Ended

December 27,

2025

December 28,

2024

(In thousands)

Sonos speakers

459,240

467,142

Sonos system products

65,058

60,274

Partner products and other revenue

21,364

23,441

Total revenue

545,662

550,857

Revenue by Geographical Region

(unaudited, dollars in thousands)

Three Months Ended

December 27,

2025

December 28,

2024

Americas

328,877

324,583

Europe, Middle East and Africa

189,441

197,612

Asia Pacific

27,344

28,662

Total revenue

545,662

550,857

Stock-based Compensation

(unaudited, dollars in thousands)

Three Months Ended

December 27,

2025

December 28,

2024

(In thousands)

Cost of revenue

1,327

1,349

Research and development

6,489

13,315

Sales and marketing

2,845

5,632

General and administrative

4,530

5,038

Total stock-based compensation expense

15,191

25,334

Amortization of Intangibles

(unaudited, dollars in thousands)

Three Months Ended

December 27,

2025

December 28,

2024

Cost of revenue

4,381

3,330

Research and development

178

Sales and marketing

General and administrative

Total amortization of intangibles

4,425

3,531

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 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 changes. 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, our ability to expand our footprint with existing customers, market growth and our market share, our ability to expand our products globally, our operating model and cost structure, our ability to create a seamless platform for the home, 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, including with respect to our redesigned app; 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; 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.