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Sonos (SONO) Q4 Earnings & Revenues Miss Estimates, Fall Y/Y
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Sonos, Inc (SONO - Free Report) reported fourth-quarter fiscal 2023 non-GAAP loss per share of 7 cents compared with 30 cents in the prior-year quarter. On a GAAP basis, the company reported a loss of 25 cents against the earnings per share (EPS) of 50 cents in the year-ago quarter. The Zacks Consensus Estimate was pegged at (5) cents.
Quarterly revenues decreased 3.5% (down 5.1% on a constant-currency basis) year over year to $305.1 million due to strong consumer demand. Also, the top line missed the Zacks Consensus Estimate by 0.2%.
Revenues from Sonos speakers were $223.3 million, down 5.1% from the prior-year quarter’s levels. The consensus estimate for the Sonos speakers segment is pegged at $229 million.
Sonos system products’ revenues were $62.3 million, down 0.8% year over year. The consensus estimate for the Sonos system products segment is pegged at $58 million. Revenues from Partner products and other totaled $19.5 million, up 5.9% year over year.
Region-wise, revenues from the Americas totaled $203.5 million, up 1.9% year over year. Europe, the Middle East and Africa generated revenues of $83.4 million, down 8.8%. Revenues from the Asia Pacific were down 27.5% to $18.2 million.
Other Details
Gross profit was $128.1 million, up 3.2% from the prior-year quarter’s levels. Gross margin expanded 270 bps year over year to 42%, mainly due to lower component costs and fewer spot component purchases.
Total operating expenses amounted to $156.4 million, down from $184.2 million in the year-ago quarter, reflecting lower research and development and general and administrative expenses.
Operating loss was $28.3 million compared with $60.1 million in the year-ago quarter. Adjusted EBITDA totaled $6.2 million compared with $(25.5) million in the prior-year quarter. Higher gross margins and reduced bonus accrual and marketing and legal program spending resulted in the upside.
Cash Flow & Liquidity
For the fiscal fourth quarter, Sonos generated $22.1 million of cash from operations. Free cash flow was $11.9 million.
As of Sep 30, 2023, cash and cash equivalents were $220.3 million compared with $294.9 million as of Jul 1, 2023. SONO has no debt.
Sonos repurchased shares worth $55 million. The company has authorized a new share repurchase program of up to $200 million.
2024 Guidance
For fiscal 2024, Sonos now expects revenues to be down 3% to up 3% year over year and in the range of $1.6-$1.7 billion. On a constant-currency basis, revenues are anticipated to be down 3% to up 3%.
The gross margin is projected to be between 44% and 46%. Adjusted EBITDA is estimated to be between $150 million and $180 million, with the margin in the range of 9.4-10.6%.
The Zacks Consensus Estimate for Guidewire Software’s fiscal 2024 EPS has increased 10.5% in the past 60 days to 74 cents. Shares of GWRE have soared 47.1% in the past year.
The Zacks Consensus Estimate for Flex’s fiscal 2024 EPS has gained 3.6% in the past 60 days to $2.56. Flex’s long-term earnings growth rate is 12.4%. Shares of FLEX have gained 29.5% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has improved 7.3% in the past 60 days to $3.07.
Badger Meter’s earnings outpaced the Zacks Consensus Estimate in all the last four quarters, the average surprise being 10.3%. Shares of BMI have rallied 24.6% in the past year.
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Sonos (SONO) Q4 Earnings & Revenues Miss Estimates, Fall Y/Y
Sonos, Inc (SONO - Free Report) reported fourth-quarter fiscal 2023 non-GAAP loss per share of 7 cents compared with 30 cents in the prior-year quarter. On a GAAP basis, the company reported a loss of 25 cents against the earnings per share (EPS) of 50 cents in the year-ago quarter. The Zacks Consensus Estimate was pegged at (5) cents.
Quarterly revenues decreased 3.5% (down 5.1% on a constant-currency basis) year over year to $305.1 million due to strong consumer demand. Also, the top line missed the Zacks Consensus Estimate by 0.2%.
Sonos, Inc. Price, Consensus and EPS Surprise
Sonos, Inc. price-consensus-eps-surprise-chart | Sonos, Inc. Quote
Revenues Details
Revenues from Sonos speakers were $223.3 million, down 5.1% from the prior-year quarter’s levels. The consensus estimate for the Sonos speakers segment is pegged at $229 million.
Sonos system products’ revenues were $62.3 million, down 0.8% year over year. The consensus estimate for the Sonos system products segment is pegged at $58 million. Revenues from Partner products and other totaled $19.5 million, up 5.9% year over year.
Region-wise, revenues from the Americas totaled $203.5 million, up 1.9% year over year. Europe, the Middle East and Africa generated revenues of $83.4 million, down 8.8%. Revenues from the Asia Pacific were down 27.5% to $18.2 million.
Other Details
Gross profit was $128.1 million, up 3.2% from the prior-year quarter’s levels. Gross margin expanded 270 bps year over year to 42%, mainly due to lower component costs and fewer spot component purchases.
Total operating expenses amounted to $156.4 million, down from $184.2 million in the year-ago quarter, reflecting lower research and development and general and administrative expenses.
Operating loss was $28.3 million compared with $60.1 million in the year-ago quarter. Adjusted EBITDA totaled $6.2 million compared with $(25.5) million in the prior-year quarter. Higher gross margins and reduced bonus accrual and marketing and legal program spending resulted in the upside.
Cash Flow & Liquidity
For the fiscal fourth quarter, Sonos generated $22.1 million of cash from operations. Free cash flow was $11.9 million.
As of Sep 30, 2023, cash and cash equivalents were $220.3 million compared with $294.9 million as of Jul 1, 2023. SONO has no debt.
Sonos repurchased shares worth $55 million. The company has authorized a new share repurchase program of up to $200 million.
2024 Guidance
For fiscal 2024, Sonos now expects revenues to be down 3% to up 3% year over year and in the range of $1.6-$1.7 billion. On a constant-currency basis, revenues are anticipated to be down 3% to up 3%.
The gross margin is projected to be between 44% and 46%. Adjusted EBITDA is estimated to be between $150 million and $180 million, with the margin in the range of 9.4-10.6%.
Zacks Rank
Sonos currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the broader technology space are Guidewire Software (GWRE - Free Report) , Flex (FLEX - Free Report) and Badger Meter (BMI - Free Report) . Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Guidewire Software’s fiscal 2024 EPS has increased 10.5% in the past 60 days to 74 cents. Shares of GWRE have soared 47.1% in the past year.
The Zacks Consensus Estimate for Flex’s fiscal 2024 EPS has gained 3.6% in the past 60 days to $2.56. Flex’s long-term earnings growth rate is 12.4%. Shares of FLEX have gained 29.5% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has improved 7.3% in the past 60 days to $3.07.
Badger Meter’s earnings outpaced the Zacks Consensus Estimate in all the last four quarters, the average surprise being 10.3%. Shares of BMI have rallied 24.6% in the past year.