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Sonos (SONO) Beats on Earnings In Q1, Raises '22 Outlook
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Sonos, Inc. (SONO - Free Report) reported first-quarter 2022 non-GAAP earnings of $1.02 per share, which beat the Zacks Consensus Estimate by 15.9%. However, the figure declined 12.8% on a year-over-year basis.
Quarterly revenues rose 3.5% year over year to $664.5 million, driven by robust demand for its products despite continued supply constraints stemming from the pandemic. The top line surpassed the consensus estimate by 3.8%.
Driven by strong quarterly results, Sonos raised the outlook for fiscal 2022. Sonos expects revenues to grow 14-16% year over year in the band of $1.95-$2 billion. Previously, management projected revenues to grow 12-16% year over year and reach $1.925-$2 billion.
Following the announcement, shares were up 6% in the pre-market trading on Feb 10. In the past year, shares of Sonos have declined 26.9% compared with the industry’s decline of 5.2%.
By product category, revenues for Sonos speakers were $501.9 million, down 4.9% from the prior-year quarter’s levels. Sonos system products revenues were $134.7 million, up 37.8%. Partner products and other revenues totaled $27.9 million, up 37.1% year over year.
Region-wise, revenues from the Americas came in at $373.8 million, up 1.8% year over year. Revenues from Europe, the Middle East and Africa were $245.5 million, up 2.3%. Revenues from the Asia Pacific rose 17.9% to $45.2 million.
Other Details
Gross profit was $317.4 million compared with $299.4 million in the prior-year quarter, with the respective margins of 47.8% and 46.4%. Favorable product mix and reduced promotional activity cushioned margin growth amid higher shipping and logistics costs.
Total operating expenses were $184.8 million, up from $162 million, reflecting higher research and development as well as sales and marketing expenses.
Operating income was $132.6 million compared with $137.4 million in the year-ago quarter. Adjusted EBITDA totaled $163.1 million compared with $166.3 million a year ago, with respective margins of 24.6% and 25.8%. The downside in adjusted EBITDA was caused by higher operating investments.
Cash Flow & Liquidity
For the fiscal first quarter, Sonos generated $179.9 million of cash from operations compared with $214.5 million in the year-ago quarter. Free cash flow for the same period fell 14.6% to $173.6 million.
As of Jan 1, 2022, the company had $754.4 million in cash and cash equivalents compared with $640.1 million as of Oct 2, 2021. The company has no debt.
Fiscal 2022 Outlook
Adjusted EBITDA is now estimated to be between $290 million and $325 million, with the margin ranging from 14.9-16.2%. Earlier, the company projected adjusted EBITDA to be between $280 million and $325 million, with the margin ranging from 14.5-16.2%. The gross margin is projected to be between 46% and 47%.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $33.03 per share. The long-term earnings growth rate of the company is pegged at 14.5%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 1.41%. Shares of Broadcom have increased 31.5% in the past year.
The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.15 per share. The long-term earnings growth rate of the company is pegged at 12.5%.
Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 20.3%. Shares of AAPL have rallied 31.2% in the past year.
The Zacks Consensus Estimate for Cadence 2021 earnings is pegged at $3.25 per share. The long-term earnings growth rate of the company is pegged at 18.2%.
Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11%. Shares of CDNS have returned 7.2% in the past year.
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Sonos (SONO) Beats on Earnings In Q1, Raises '22 Outlook
Sonos, Inc. (SONO - Free Report) reported first-quarter 2022 non-GAAP earnings of $1.02 per share, which beat the Zacks Consensus Estimate by 15.9%. However, the figure declined 12.8% on a year-over-year basis.
Quarterly revenues rose 3.5% year over year to $664.5 million, driven by robust demand for its products despite continued supply constraints stemming from the pandemic. The top line surpassed the consensus estimate by 3.8%.
Driven by strong quarterly results, Sonos raised the outlook for fiscal 2022. Sonos expects revenues to grow 14-16% year over year in the band of $1.95-$2 billion. Previously, management projected revenues to grow 12-16% year over year and reach $1.925-$2 billion.
Following the announcement, shares were up 6% in the pre-market trading on Feb 10. In the past year, shares of Sonos have declined 26.9% compared with the industry’s decline of 5.2%.
Sonos, Inc. Price, Consensus and EPS Surprise
Sonos, Inc. price-consensus-eps-surprise-chart | Sonos, Inc. Quote
Revenue Details
By product category, revenues for Sonos speakers were $501.9 million, down 4.9% from the prior-year quarter’s levels. Sonos system products revenues were $134.7 million, up 37.8%. Partner products and other revenues totaled $27.9 million, up 37.1% year over year.
Region-wise, revenues from the Americas came in at $373.8 million, up 1.8% year over year. Revenues from Europe, the Middle East and Africa were $245.5 million, up 2.3%. Revenues from the Asia Pacific rose 17.9% to $45.2 million.
Other Details
Gross profit was $317.4 million compared with $299.4 million in the prior-year quarter, with the respective margins of 47.8% and 46.4%. Favorable product mix and reduced promotional activity cushioned margin growth amid higher shipping and logistics costs.
Total operating expenses were $184.8 million, up from $162 million, reflecting higher research and development as well as sales and marketing expenses.
Operating income was $132.6 million compared with $137.4 million in the year-ago quarter. Adjusted EBITDA totaled $163.1 million compared with $166.3 million a year ago, with respective margins of 24.6% and 25.8%. The downside in adjusted EBITDA was caused by higher operating investments.
Cash Flow & Liquidity
For the fiscal first quarter, Sonos generated $179.9 million of cash from operations compared with $214.5 million in the year-ago quarter. Free cash flow for the same period fell 14.6% to $173.6 million.
As of Jan 1, 2022, the company had $754.4 million in cash and cash equivalents compared with $640.1 million as of Oct 2, 2021. The company has no debt.
Fiscal 2022 Outlook
Adjusted EBITDA is now estimated to be between $290 million and $325 million, with the margin ranging from 14.9-16.2%. Earlier, the company projected adjusted EBITDA to be between $280 million and $325 million, with the margin ranging from 14.5-16.2%. The gross margin is projected to be between 46% and 47%.
Zacks Rank & Stocks to Consider
Sonos currently carries a Zacks Rank #3 (Hold).
Some other top-ranked stocks worth consideration from the broader technology sector include Broadcom (AVGO - Free Report) , Apple (AAPL - Free Report) and Cadence Design Systems (CDNS - Free Report) . While Apple sports a Zacks Rank #1 (Strong Buy), Broadcom and Cadence carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Broadcom’s fiscal 2022 earnings is pegged at $33.03 per share. The long-term earnings growth rate of the company is pegged at 14.5%.
Broadcom’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 1.41%. Shares of Broadcom have increased 31.5% in the past year.
The Zacks Consensus Estimate for Apple’s fiscal 2022 earnings is pegged at $6.15 per share. The long-term earnings growth rate of the company is pegged at 12.5%.
Apple’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 20.3%. Shares of AAPL have rallied 31.2% in the past year.
The Zacks Consensus Estimate for Cadence 2021 earnings is pegged at $3.25 per share. The long-term earnings growth rate of the company is pegged at 18.2%.
Cadence’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11%. Shares of CDNS have returned 7.2% in the past year.