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Sonos to Announce Q3 Earnings: Here's What You Should Know
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Key Takeaways
SONO projects Q3 EPS of $0.09, down from $0.23 a year ago, with revenue seen falling up to 22% year over year.
High-margin product launches like Sonos Ace and Era 100 Pro may help offset margin and demand pressures.
Non-GAAP operating expenses are forecast at $135M-$140M, down as much as 13% from Q3 of last year.
Sonos, Inc. (SONO - Free Report) is scheduled to report third-quarter fiscal 2025 results on Aug. 6, after market close.
For the quarter, SONO anticipates revenues between $310 million and $340 million, up 19–31% sequentially due to seasonality, but down 14–22% year over year, owing to last year's Ace headphone launch timing. The Zacks Consensus Estimate for revenues is pegged at $319 million, indicating a decline of 19.7% from the year-ago reported number.
The consensus estimate for earnings is pegged at 9 cents. It had reported 23 cents in the prior-year quarter.
The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and met in one. It delivered a trailing four-quarter average earnings surprise of 29.3%.
Sonos’ fiscal third-quarter performance is likely to have been adversely impacted by multiple headwinds, including its product categories, which remain cyclically pressured and highly promotional, particularly in the portables segment. Uncertain demand trends pose a concern.
As global supply chains remain exposed to shifting tariffs and regulatory pressures, Sonos continues to navigate these challenges that might have hurt its margins and weakened its competitive edge in the quarter to be reported. On the last earnings call, management stated that P&L expenses related to tariffs are expected to be less than $3 million in the fiscal third quarter and rise to $5-$10 million in the fiscal fourth quarter. Actual cash outlay related to tariffs is projected between $5 million and $10 million during the fiscal third quarter, potentially rising to $20-$30 million in the fiscal fourth quarter due to inventory build.
Moreover, supply chain disruptions, lack of customer confidence, financial market volatility and lower discretionary spending are likely to have hurt its third-quarter performance.
For the third quarter, Sonos expects GAAP gross margin to be in the band of 43% to 45%. Non-GAAP gross margin is predicted to be in the range of 45.2% to 47%. Non-GAAP operating expenses are projected to be between $135 million and $140 million, indicating a 10% to 13% decrease from $155 million in the same period last year. Adjusted EBITDA is likely to be in the range of $12 million to $37 million.
However, Sonos’ focus on product innovation is expected to have offset third-quarter challenges. The strong launch of Sonos Ace expanded the company into the high-margin personal listening category, supporting top-line performance amid disruptions from the app redesign. Continued demand for flagship products like the Arc Ultra and Sub 4 is likely to have bolstered revenue momentum.
Additionally, the introduction of the Era 100 Pro marked Sonos’ strategic entry into the light-commercial audio market, opening a new revenue stream that may have contributed to overall growth and partially mitigated margin and operational pressures during the quarter. The Era 100 speaker was repriced to under $200, matching the price of its predecessors, to attract new households and drive long-term system expansion. It plans to maintain a cadence of two hardware launches per year, with a focus on software-driven differentiation and a strong product roadmap for future innovation.
Sonos’ ongoing expansion of its direct-to-consumer initiatives, broader partner ecosystem and growing international presence, particularly in Asia, are likely to have supported its third-quarter performance.
What Our Model Says About SONO
Our proven model does not predict an earnings beat for SONO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
SONO has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.
The consensus estimate for Emerson Electric’s earnings for the third quarter of fiscal 2025 is pegged at $1.51 per share, indicating year-over-year growth of 5.6%. EMR has a trailing four-quarter average surprise of 3.4%.
Axon Enterprise, Inc. (AXON - Free Report) currently has an Earnings ESP of +0.54% and a Zacks Rank of 2. The company is slated to report second-quarter 2025 results on Aug. 4. The Zacks Consensus Estimate for second-quarter 2025 revenues and earnings are pegged at $643 million and $1.54 per share, respectively.
Shares of AXON have increased 158.4% in the past year.
Primoris Services Corporation (PRIM - Free Report) is set to report its second-quarter 2025 results on Aug. 4, after market close. It has an Earnings ESP of +0.54% and a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for PRIM’s earnings is pegged at $1.06 per share, indicating year-over-year growth of 1.92%. The consensus estimate for its sales is pegged at $1.68 billion, indicating year-over-year growth of 7.7%.
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Sonos to Announce Q3 Earnings: Here's What You Should Know
Key Takeaways
Sonos, Inc. (SONO - Free Report) is scheduled to report third-quarter fiscal 2025 results on Aug. 6, after market close.
For the quarter, SONO anticipates revenues between $310 million and $340 million, up 19–31% sequentially due to seasonality, but down 14–22% year over year, owing to last year's Ace headphone launch timing. The Zacks Consensus Estimate for revenues is pegged at $319 million, indicating a decline of 19.7% from the year-ago reported number.
The consensus estimate for earnings is pegged at 9 cents. It had reported 23 cents in the prior-year quarter.
The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and met in one. It delivered a trailing four-quarter average earnings surprise of 29.3%.
In the past year, shares of SONO have lost 13.8% against the Zacks Audio Video Production industry’s growth of 44%.
Image Source: Zacks Investment Research
Factors Shaping SONO’s Q3 Results
Sonos’ fiscal third-quarter performance is likely to have been adversely impacted by multiple headwinds, including its product categories, which remain cyclically pressured and highly promotional, particularly in the portables segment. Uncertain demand trends pose a concern.
As global supply chains remain exposed to shifting tariffs and regulatory pressures, Sonos continues to navigate these challenges that might have hurt its margins and weakened its competitive edge in the quarter to be reported. On the last earnings call, management stated that P&L expenses related to tariffs are expected to be less than $3 million in the fiscal third quarter and rise to $5-$10 million in the fiscal fourth quarter. Actual cash outlay related to tariffs is projected between $5 million and $10 million during the fiscal third quarter, potentially rising to $20-$30 million in the fiscal fourth quarter due to inventory build.
Moreover, supply chain disruptions, lack of customer confidence, financial market volatility and lower discretionary spending are likely to have hurt its third-quarter performance.
For the third quarter, Sonos expects GAAP gross margin to be in the band of 43% to 45%. Non-GAAP gross margin is predicted to be in the range of 45.2% to 47%. Non-GAAP operating expenses are projected to be between $135 million and $140 million, indicating a 10% to 13% decrease from $155 million in the same period last year. Adjusted EBITDA is likely to be in the range of $12 million to $37 million.
Sonos, Inc. Price and EPS Surprise
Sonos, Inc. price-eps-surprise | Sonos, Inc. Quote
However, Sonos’ focus on product innovation is expected to have offset third-quarter challenges. The strong launch of Sonos Ace expanded the company into the high-margin personal listening category, supporting top-line performance amid disruptions from the app redesign. Continued demand for flagship products like the Arc Ultra and Sub 4 is likely to have bolstered revenue momentum.
Additionally, the introduction of the Era 100 Pro marked Sonos’ strategic entry into the light-commercial audio market, opening a new revenue stream that may have contributed to overall growth and partially mitigated margin and operational pressures during the quarter. The Era 100 speaker was repriced to under $200, matching the price of its predecessors, to attract new households and drive long-term system expansion. It plans to maintain a cadence of two hardware launches per year, with a focus on software-driven differentiation and a strong product roadmap for future innovation.
Sonos’ ongoing expansion of its direct-to-consumer initiatives, broader partner ecosystem and growing international presence, particularly in Asia, are likely to have supported its third-quarter performance.
What Our Model Says About SONO
Our proven model does not predict an earnings beat for SONO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
SONO has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.
Emerson Electric Co. (EMR - Free Report) , expected to release earnings on Aug. 6, currently has an Earnings ESP of +0.46% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Emerson Electric’s earnings for the third quarter of fiscal 2025 is pegged at $1.51 per share, indicating year-over-year growth of 5.6%. EMR has a trailing four-quarter average surprise of 3.4%.
Axon Enterprise, Inc. (AXON - Free Report) currently has an Earnings ESP of +0.54% and a Zacks Rank of 2. The company is slated to report second-quarter 2025 results on Aug. 4. The Zacks Consensus Estimate for second-quarter 2025 revenues and earnings are pegged at $643 million and $1.54 per share, respectively.
Shares of AXON have increased 158.4% in the past year.
Primoris Services Corporation (PRIM - Free Report) is set to report its second-quarter 2025 results on Aug. 4, after market close. It has an Earnings ESP of +0.54% and a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for PRIM’s earnings is pegged at $1.06 per share, indicating year-over-year growth of 1.92%. The consensus estimate for its sales is pegged at $1.68 billion, indicating year-over-year growth of 7.7%.