Sonos, Inc. (SONO - Free Report) reported solid third-quarter fiscal 2021 results, wherein both the bottom line and the top line beat the Zacks Consensus Estimate.
This Santa Barbara, CA-based sound experience company remains focused on its three strategic initiatives — the expansion of its brand, the expansion of its offerings and driving operational excellence.
Net Income
On a GAAP basis, quarterly net income was $17.8 million or 12 cents per share against a net loss of $57 million or loss of 52 cents per share in the prior-year quarter. The significant improvement primarily resulted from an operating income and higher other income.
Non-GAAP net income was $38.7 million or 27 cents per share against a net loss of $11.6 million or loss of 11 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 44 cents, delivering a surprise of 258.8%.
Revenues
Quarterly revenues increased 51.9% year over year to $378.7 million, driven by robust demand for its products. The top line surpassed the consensus estimate of $320 million.
By product category, revenues for Sonos speakers were $310.2 million compared with $196.9 million in the prior-year quarter. Sonos system products revenues were $47.6 million, up 12.9%, and the same from partner products and other revenues totaled $20.8 million compared with $10.3 million a year ago.
Region wise, revenues from the Americas came in at $223.7 million compared with $151.2 million a year ago. Revenues from Europe, Middle East and Africa were $126.2 million, up from $83.8 million and the same from Asia Pacific grew 100.5% to $28.7 million.
Other Details
Gross profit was $177.9 million compared with $109.8 million in the prior-year quarter with the respective margins of 47% and 44%. Total operating expenses were $161.1 million, down from $166.7 million, reflecting lower research and development as well as sales and marketing expenses.
Operating income was $16.7 million against an operating loss of $56.9 million in the year-ago quarter. Adjusted EBITDA totaled $46.7 million against a negative $2.7 million a year ago, with the respective margins of 12.3% and -1.1%.
Cash Flow & Liquidity
During the first nine months of fiscal 2021, Sonos generated $246.7 million of cash from operations compared with $83.2 million in the prior-year period. Free cash flow increased 298% to $211.9 million.
As of Jul 3, 2021, the company had $670.9 million in cash and cash equivalents with zero long-term debt.
Fiscal 2021 Outlook Raised
Thanks to the stellar performance, Sonos has raised the outlook for fiscal 2021. It now expects revenues to grow at 28-29% year over year to be in the band of $1.695 billion and $1.710 billion compared with the prior guidance of $1.625-$1.675 billion.
Adjusted EBITDA is estimated to be between $270 million and $280 million with the margin increased to a range of 15.9-16.4%. This compares with the prior outlook of $225-$250 million with the margin ranging from 13.8% to 14.9%. Gross margin is projected to be between 46.5% and 46.9%, increased from the prior guidance of 46-46.5%.
Zacks Rank & Stocks to Consider
Sonos currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader sector are Clearfield, Inc. (CLFD - Free Report) , Juniper Networks, Inc. (JNPR - Free Report) and Qualcomm, Inc. (QCOM - Free Report) . While Clearfield sports a Zacks Rank #1 (Strong Buy), Juniper and Qualcomm carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Clearfield delivered a trailing four-quarter earnings surprise of 49%, on average.
Juniper pulled off a trailing four-quarter earnings surprise of 7.5%, on average.
Qualcomm delivered a trailing four-quarter earnings surprise of 13.5%, on average.
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Sonos, Inc. (SONO - Free Report) reported solid third-quarter fiscal 2021 results, wherein both the bottom line and the top line beat the Zacks Consensus Estimate.
This Santa Barbara, CA-based sound experience company remains focused on its three strategic initiatives — the expansion of its brand, the expansion of its offerings and driving operational excellence.
Net Income
On a GAAP basis, quarterly net income was $17.8 million or 12 cents per share against a net loss of $57 million or loss of 52 cents per share in the prior-year quarter. The significant improvement primarily resulted from an operating income and higher other income.
Non-GAAP net income was $38.7 million or 27 cents per share against a net loss of $11.6 million or loss of 11 cents per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 44 cents, delivering a surprise of 258.8%.
Revenues
Quarterly revenues increased 51.9% year over year to $378.7 million, driven by robust demand for its products. The top line surpassed the consensus estimate of $320 million.
By product category, revenues for Sonos speakers were $310.2 million compared with $196.9 million in the prior-year quarter. Sonos system products revenues were $47.6 million, up 12.9%, and the same from partner products and other revenues totaled $20.8 million compared with $10.3 million a year ago.
Region wise, revenues from the Americas came in at $223.7 million compared with $151.2 million a year ago. Revenues from Europe, Middle East and Africa were $126.2 million, up from $83.8 million and the same from Asia Pacific grew 100.5% to $28.7 million.
Other Details
Gross profit was $177.9 million compared with $109.8 million in the prior-year quarter with the respective margins of 47% and 44%. Total operating expenses were $161.1 million, down from $166.7 million, reflecting lower research and development as well as sales and marketing expenses.
Operating income was $16.7 million against an operating loss of $56.9 million in the year-ago quarter. Adjusted EBITDA totaled $46.7 million against a negative $2.7 million a year ago, with the respective margins of 12.3% and -1.1%.
Cash Flow & Liquidity
During the first nine months of fiscal 2021, Sonos generated $246.7 million of cash from operations compared with $83.2 million in the prior-year period. Free cash flow increased 298% to $211.9 million.
As of Jul 3, 2021, the company had $670.9 million in cash and cash equivalents with zero long-term debt.
Fiscal 2021 Outlook Raised
Thanks to the stellar performance, Sonos has raised the outlook for fiscal 2021. It now expects revenues to grow at 28-29% year over year to be in the band of $1.695 billion and $1.710 billion compared with the prior guidance of $1.625-$1.675 billion.
Adjusted EBITDA is estimated to be between $270 million and $280 million with the margin increased to a range of 15.9-16.4%. This compares with the prior outlook of $225-$250 million with the margin ranging from 13.8% to 14.9%. Gross margin is projected to be between 46.5% and 46.9%, increased from the prior guidance of 46-46.5%.
Zacks Rank & Stocks to Consider
Sonos currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader sector are Clearfield, Inc. (CLFD - Free Report) , Juniper Networks, Inc. (JNPR - Free Report) and Qualcomm, Inc. (QCOM - Free Report) . While Clearfield sports a Zacks Rank #1 (Strong Buy), Juniper and Qualcomm carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Clearfield delivered a trailing four-quarter earnings surprise of 49%, on average.
Juniper pulled off a trailing four-quarter earnings surprise of 7.5%, on average.
Qualcomm delivered a trailing four-quarter earnings surprise of 13.5%, on average.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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