Sonos, Inc (SONO - Free Report) reported a non-GAAP earnings of 79 cents per share for first-quarter fiscal 2023 compared with $1.03 in the prior-year quarter. On a GAAP basis, the company reported earnings of 57 cents per share compared with 87 cents reported in the prior-year quarter. The Zacks Consensus Estimate was pegged at 33 cents per share.
Quarterly revenues increased 1.2% (up 7% on a constant-currency basis or cc) year over year to $672.6 million, due to increased volume from higher promotional activity and improved product supply. The top line beat the Zacks Consensus Estimate by 11.7%. However, unfavorable foreign exchange movements affected sales by $39 million.
Following the announcement, shares are up 15% in pre-market trading on Feb 9. In the past year, shares of Sonos have declined 32.9% compared with the sub industry’s fall of 17.2%.
Revenues Details
Revenues from Sonos speakers were $539.1 million, up 7.4% from the prior-year quarter’s levels.
Sonos system products’ revenues were $114.4 million, down 15.1%. Revenues from Partner products and other totaled $18.9 million, down 32% year over year.
Region-wise, revenues from the Americas came in at $396.6 million, up 6.1% year over year. Revenues from Europe, the Middle East and Africa were $240.4 million, down 2%. Revenues from the Asia Pacific were down 21.3% to $35.6 million.
Other Details
Gross profit was $285.1 million, down 10.2% from the prior-year quarter’s levels. Gross margin contracted 540 bps year over year to 42.4%, mainly due to increasing component costs and resumption of normal holiday promotion and forex volatility.
Total operating expenses were $198.7 million, up from $184.8 million, reflecting higher research and development, and general and administrative expenses.
Operating income was $86.3 million compared with $132.6 million in the year-ago quarter. Adjusted EBITDA totaled $123.9 million compared with $163.1 million in the prior-year quarter. Higher operating investments resulted in the downside.
Cash Flow & Liquidity
For the fiscal first quarter, Sonos generated $182.3 million of cash from operations. Free cash flow was $167.6 million.
As of Dec 31, 2022, the company had $431.5 million in cash and cash equivalents compared with $274.9 million as of Oct 1, 2022. The company has no debt.
Guidance for Fiscal 2023
Sonos expects revenues to be down 3% to up 3% year over year and 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 & Other Stocks to Consider
Sonos currently carries a Zacks Rank #2 (Buy).
Investors interested in the broader technology space may also consider stocks like Arista Networks (ANET - Free Report) , Jabil (JBL - Free Report) and Super Micro Computer (SMCI - Free Report) . While Jabil sports a Zacks Rank #1 (Strong Buy), Arista Networks and Super Micro Computer carry a Zacks Rank #2. 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 $4.38 per share, up 1 cent 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 gained 5.5% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% 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 all the last four quarters, the average being 8.8%. Shares of JBL have increased 30.7% in the past year.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2023 earnings is pegged at $10.68 per share, up 11.5% in the past 60 days.
Super Micro Computer’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 7.8%. Shares of SMCI have gained 120.5% in the past year
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Sonos, Inc (SONO - Free Report) reported a non-GAAP earnings of 79 cents per share for first-quarter fiscal 2023 compared with $1.03 in the prior-year quarter. On a GAAP basis, the company reported earnings of 57 cents per share compared with 87 cents reported in the prior-year quarter. The Zacks Consensus Estimate was pegged at 33 cents per share.
Quarterly revenues increased 1.2% (up 7% on a constant-currency basis or cc) year over year to $672.6 million, due to increased volume from higher promotional activity and improved product supply. The top line beat the Zacks Consensus Estimate by 11.7%. However, unfavorable foreign exchange movements affected sales by $39 million.
Following the announcement, shares are up 15% in pre-market trading on Feb 9. In the past year, shares of Sonos have declined 32.9% compared with the sub industry’s fall of 17.2%.
Revenues Details
Revenues from Sonos speakers were $539.1 million, up 7.4% from the prior-year quarter’s levels.
Sonos system products’ revenues were $114.4 million, down 15.1%. Revenues from Partner products and other totaled $18.9 million, down 32% year over year.
Region-wise, revenues from the Americas came in at $396.6 million, up 6.1% year over year. Revenues from Europe, the Middle East and Africa were $240.4 million, down 2%. Revenues from the Asia Pacific were down 21.3% to $35.6 million.
Other Details
Gross profit was $285.1 million, down 10.2% from the prior-year quarter’s levels. Gross margin contracted 540 bps year over year to 42.4%, mainly due to increasing component costs and resumption of normal holiday promotion and forex volatility.
Total operating expenses were $198.7 million, up from $184.8 million, reflecting higher research and development, and general and administrative expenses.
Operating income was $86.3 million compared with $132.6 million in the year-ago quarter. Adjusted EBITDA totaled $123.9 million compared with $163.1 million in the prior-year quarter. Higher operating investments resulted in the downside.
Cash Flow & Liquidity
For the fiscal first quarter, Sonos generated $182.3 million of cash from operations. Free cash flow was $167.6 million.
As of Dec 31, 2022, the company had $431.5 million in cash and cash equivalents compared with $274.9 million as of Oct 1, 2022. The company has no debt.
Guidance for Fiscal 2023
Sonos expects revenues to be down 3% to up 3% year over year and 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 & Other Stocks to Consider
Sonos currently carries a Zacks Rank #2 (Buy).
Investors interested in the broader technology space may also consider stocks like Arista Networks (ANET - Free Report) , Jabil (JBL - Free Report) and Super Micro Computer (SMCI - Free Report) . While Jabil sports a Zacks Rank #1 (Strong Buy), Arista Networks and Super Micro Computer carry a Zacks Rank #2. 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 $4.38 per share, up 1 cent 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 gained 5.5% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% 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 all the last four quarters, the average being 8.8%. Shares of JBL have increased 30.7% in the past year.
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2023 earnings is pegged at $10.68 per share, up 11.5% in the past 60 days.
Super Micro Computer’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 7.8%. Shares of SMCI have gained 120.5% in the past year
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
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