Sonos, Inc (SONO - Free Report) reported a non-GAAP loss of 32 cents per share for fourth-quarter fiscal 2022 against earnings of 8 cents per share in the prior-year quarter. The Zacks Consensus Estimate was pegged at a loss of 43 cents per share.
Quarterly revenues declined 12% (up 6.6% on a constant-currency basis or cc) year over year to $316.3 million, owing to soft demand for its products amid continued supply constraints and unfavorable foreign exchange movements. However, the top line beat the consensus estimate by 4.6%.
The company also announced a new $100 million share repurchase program after completing the existing $150 million share repurchase plan.
Following the announcement, shares rose 4% in pre-market trading on Nov 17. In the past year, shares of Sonos have declined 49.7% compared with the industry’s fall of 34.9%.
Revenue Details
Revenues from Sonos speakers were $235.1 million, up 14.1% from the prior-year quarter’s levels.
Sonos system products’ revenues were $62.8 million, down 7.3%. Revenues from Partner products and other totaled $18.4 million, up 0.8% year over year.
Region-wise, revenues from the Americas came in at $199.7 million, up 2% year over year. Revenues from Europe, the Middle East and Africa were $91.4 million, down 34%. Revenues from the Asia Pacific were down 2% to $25.2 million.
Other Details
Gross profit was $124.1 million, down 25.6% from the prior-year quarter’s levels. Gross margin contracted 720 bps year over year to 39.2%, mainly due to increasing component costs.
Total operating expenses were $184.1 million, up from $178.5 million, reflecting higher research and development, and general and administrative expenses.
Operating loss was $60 million compared with $11.5 million in the year-ago quarter. Adjusted EBITDA loss totaled $25.6 million compared with adjusted EBITDA income of $17.1 million in the prior-year quarter. The downside in adjusted EBITDA was caused by higher operating investments and lower revenue.
Cash Flow & Liquidity
For the fiscal year, Sonos used $28.3 million of cash from operations. Free cash outflow was $74.5 million.
As of Oct 1, 2022, the company had $274.9 million in cash and cash equivalents compared with $640.1 million as of Oct 2, 2021. The company has no debt.
Guidance
Sonos now expects revenues to be down 3% to up 3% year over year and come in the range of $1.7-$1.8 billion. On a constant-currency basis, revenues are expected to increase 1-7%. The gross margin is now projected to be between 45% and 46%.
Adjusted EBITDA is estimated to be between $145 million and $180 million, with the margin ranging from 8.5-10%.
Zacks Rank & Stocks to Consider
Sonos currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader technology space are Arista Networks (ANET - Free Report) , Blackbaud (BLKB - Free Report) and Jabil (JBL - Free Report) . Arista Networks and Jabil currently sport a Zacks Rank #1 (Strong Buy) while Blackbaud carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $4.35 per share, up 7.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have decreased 1.4% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2022 earnings is pegged at $2.59 per share, up 1.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 4%.
Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 4.9%. Shares of BLKB have declined 29% in the past year.
The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have increased 4.8% in the past year.
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Sonos, Inc (SONO - Free Report) reported a non-GAAP loss of 32 cents per share for fourth-quarter fiscal 2022 against earnings of 8 cents per share in the prior-year quarter. The Zacks Consensus Estimate was pegged at a loss of 43 cents per share.
Quarterly revenues declined 12% (up 6.6% on a constant-currency basis or cc) year over year to $316.3 million, owing to soft demand for its products amid continued supply constraints and unfavorable foreign exchange movements. However, the top line beat the consensus estimate by 4.6%.
The company also announced a new $100 million share repurchase program after completing the existing $150 million share repurchase plan.
Following the announcement, shares rose 4% in pre-market trading on Nov 17. In the past year, shares of Sonos have declined 49.7% compared with the industry’s fall of 34.9%.
Revenue Details
Revenues from Sonos speakers were $235.1 million, up 14.1% from the prior-year quarter’s levels.
Sonos system products’ revenues were $62.8 million, down 7.3%. Revenues from Partner products and other totaled $18.4 million, up 0.8% year over year.
Region-wise, revenues from the Americas came in at $199.7 million, up 2% year over year. Revenues from Europe, the Middle East and Africa were $91.4 million, down 34%. Revenues from the Asia Pacific were down 2% to $25.2 million.
Other Details
Gross profit was $124.1 million, down 25.6% from the prior-year quarter’s levels. Gross margin contracted 720 bps year over year to 39.2%, mainly due to increasing component costs.
Total operating expenses were $184.1 million, up from $178.5 million, reflecting higher research and development, and general and administrative expenses.
Operating loss was $60 million compared with $11.5 million in the year-ago quarter. Adjusted EBITDA loss totaled $25.6 million compared with adjusted EBITDA income of $17.1 million in the prior-year quarter. The downside in adjusted EBITDA was caused by higher operating investments and lower revenue.
Cash Flow & Liquidity
For the fiscal year, Sonos used $28.3 million of cash from operations. Free cash outflow was $74.5 million.
As of Oct 1, 2022, the company had $274.9 million in cash and cash equivalents compared with $640.1 million as of Oct 2, 2021. The company has no debt.
Guidance
Sonos now expects revenues to be down 3% to up 3% year over year and come in the range of $1.7-$1.8 billion. On a constant-currency basis, revenues are expected to increase 1-7%. The gross margin is now projected to be between 45% and 46%.
Adjusted EBITDA is estimated to be between $145 million and $180 million, with the margin ranging from 8.5-10%.
Zacks Rank & Stocks to Consider
Sonos currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the broader technology space are Arista Networks (ANET - Free Report) , Blackbaud (BLKB - Free Report) and Jabil (JBL - Free Report) . Arista Networks and Jabil currently sport a Zacks Rank #1 (Strong Buy) while Blackbaud carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $4.35 per share, up 7.7% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have decreased 1.4% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2022 earnings is pegged at $2.59 per share, up 1.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 4%.
Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 4.9%. Shares of BLKB have declined 29% in the past year.
The Zacks Consensus Estimate for Jabil’s fiscal 2023 earnings is pegged at $8.18 per share, rising 3.8% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 9.3%. Shares of JBL have increased 4.8% in the past year.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
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