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SONO reported Q2 revenue of $281.5M, up 8.4% YoY, beating guidance and estimates.
SONO saw improving trends, first positive Q2 adjusted EBITDA in four years and 48% EBITDA growth in H1.
SONO expects Q3 revenue of $355M-$375M with continued growth despite margin pressure from rising costs.
Sonos, Inc. (SONO - Free Report) reported second-quarter fiscal 2026 non-GAAP loss per share of 2 cents, narrower than the Zacks Consensus Estimate of a loss of 4 cents. The company reported a loss of 18 cents in the prior-year quarter. On a GAAP basis, the company reported a loss per share of 24 cents compared with a loss of 58 cents in the year-ago quarter.
Quarterly revenues increased 8.4% year over year to $281.5 million. The figure came above the company’s guidance of $250 million to $280 million. The Zacks Consensus Estimate for the top line was pegged at $264.9 million.
Management highlighted that the first half of fiscal 2026 marked a key turning point as the company returned to growth, driven by strong execution across products, software, marketing and expansion in growth markets. This led to second-quarter revenue growth — the first positive second-quarter adjusted EBITDA in four years, and a third consecutive period of improving revenue trends. Second-quarter performance exceeded expectations, with revenue near the high end of guidance and adjusted EBITDA above the midpoint, while first-half adjusted EBITDA rose 48% year over year, supported by higher gross profit and lower operating expenses, reflecting continued disciplined execution.
Following the announcement, shares of the company jumped around 6.6% in the after-market trading session yesterday. In the past year, shares have soared 61.8% against the Zacks Audio Video Production industry’s decline of 21.5%.
Image Source: Zacks Investment Research
Sonos’ Revenue Details
Revenues from Sonos speakers were $210 million, up 8% year over year.
Sonos’ system products’ revenues of $52.4 million increased 3.7%.
Revenues from Partner products and other totaled $19.1 million, up 29.9% year over year.
Region-wise, revenues from the Americas of $180.6 million increased 2.2% year over year. Europe, the Middle East and Africa generated revenues of $83.2 million, up 20.9%. Revenues from the Asia Pacific increased 25.3% to $17.8 million.
Sonos’ Margin Performance
Non-GAAP gross profit was $129.6 million, up 6% on a year-over-year basis. Non-GAAP gross margin contracted 110 basis points (bps) to 46%.
Adjusted operating expenses amounted to $136.5 million, up 1.1% year over year.
Non-GAAP research and development (R&D) expenses increased 2.1%. Non-GAAP general and administrative (G&A) expenses were down 2.3%. Non GAAP sales and marketing expenses increased 1.3%.
Non-GAAP adjusted EBITDA totaled $1.7 million. The company’s second-quarter adjusted EBITDA was anticipated in the range from a loss of $18 million to a profit of $10 million.
Cash Flow & Liquidity
In the fiscal second quarter, Sonos used $65.4 million of cash from operations. Free cash flow used was $70.2 million, up from $65.2 million used in the same period last year.
As of March 28, cash and cash equivalents were $200.2 million compared with $312.5 million as of Dec. 27, 2026. SONO has no debt.
In the second quarter, the company spent $40 million on share repurchases. Sonos still has $65 million remaining under its current share repurchase authorization.
Sonos’ Guidance
For the third quarter of fiscal 2026, the company expects revenue in the range of $355 million to $375 million, indicating year-over-year growth of 3% to 9%, with 6% growth at the midpoint. This guidance implies a modest acceleration from the second quarter on a constant-currency basis, as foreign exchange is expected to have a negligible impact on third-quarter growth. The company also noted that there will be no revenue contribution from App Multi during the quarter, as its launch is planned for the fall. Momentum is expected to continue into the fourth quarter, supporting a stronger second-half performance and full-year growth in line with prior expectations.
Gross margin for the third quarter is projected to be between 42% and 44.5% on a GAAP basis, with non-GAAP gross margin approximately 150 basis points higher, both remaining roughly flat year over year at the midpoint. The company stated that rising memory cost inflation is expected to continue into the fourth quarter, likely putting further pressure on gross margins. As a result, second-half fiscal 2026 gross margins, both GAAP and non-GAAP, are expected to be somewhat lower than those recorded in the second half of fiscal 2025. Management emphasized ongoing mitigation efforts to address these industry headwinds while maintaining focus on driving revenue growth and profitability.
Operating expenses for the third quarter are projected to be between $150 million and $160 million on a GAAP basis, with non-GAAP operating expenses approximately $18 million lower and roughly flat sequentially at the midpoint. The company expects adjusted EBITDA in the range of $20 million to $48 million, translating to a margin of 5.6% to 12.7%.
The company remains focused on achieving sustainable revenue growth alongside improved profitability and disciplined reinvestment, with early benefits emerging from the adoption of AI to enhance productivity across multiple functions.
Badger Meter, Inc. (BMI - Free Report) reported earnings per share (EPS) of 93 cents for first-quarter 2026, which missed the Zacks Consensus Estimate by 22.5%. The bottom line compared unfavorably with the year-ago quarter’s EPS of $1.30.
Quarterly net sales were $202.3 million, down 9% from $222.2 million in the year-ago quarter due to delayed project deployments and weaker-than-expected short-cycle order activity. The Zacks Consensus Estimate was pegged at $230.1 million.
Fortive Corporation (FTV - Free Report) reported first-quarter 2026 adjusted EPS of 70 cents from continuing operations, which surpassed the Zacks Consensus Estimate of 64 cents. The bottom line increased 25.4% year over year.
Revenues increased 7.7% year over year to $1069.4 million. The top line beat the Zacks Consensus Estimate by 3.8%. Core revenues jumped 5.3%.
Sensata Technologies Holding plc (ST - Free Report) reported first-quarter 2026 adjusted EPS of 86 cents, up from 78 cents a year ago. The bottom line beat the Zacks Consensus Estimate by 2.4%.
Revenues for the quarter reached $934.8 million, up 2.6% from a year ago. The figure came near to the upper end of management’s expectations ($917-$937 million) and beat the consensus estimate by 0.7%. Strength Aerospace, Defense and Commercial Equipment segments drove the top-line performance.
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Sonos' Reports Q2 Loss, Revenues Beat Estimates, Stock Jumps
Key Takeaways
Sonos, Inc. (SONO - Free Report) reported second-quarter fiscal 2026 non-GAAP loss per share of 2 cents, narrower than the Zacks Consensus Estimate of a loss of 4 cents. The company reported a loss of 18 cents in the prior-year quarter. On a GAAP basis, the company reported a loss per share of 24 cents compared with a loss of 58 cents in the year-ago quarter.
Quarterly revenues increased 8.4% year over year to $281.5 million. The figure came above the company’s guidance of $250 million to $280 million. The Zacks Consensus Estimate for the top line was pegged at $264.9 million.
Management highlighted that the first half of fiscal 2026 marked a key turning point as the company returned to growth, driven by strong execution across products, software, marketing and expansion in growth markets. This led to second-quarter revenue growth — the first positive second-quarter adjusted EBITDA in four years, and a third consecutive period of improving revenue trends. Second-quarter performance exceeded expectations, with revenue near the high end of guidance and adjusted EBITDA above the midpoint, while first-half adjusted EBITDA rose 48% year over year, supported by higher gross profit and lower operating expenses, reflecting continued disciplined execution.
Following the announcement, shares of the company jumped around 6.6% in the after-market trading session yesterday. In the past year, shares have soared 61.8% against the Zacks Audio Video Production industry’s decline of 21.5%.
Image Source: Zacks Investment Research
Sonos’ Revenue Details
Revenues from Sonos speakers were $210 million, up 8% year over year.
Sonos’ system products’ revenues of $52.4 million increased 3.7%.
Revenues from Partner products and other totaled $19.1 million, up 29.9% year over year.
Region-wise, revenues from the Americas of $180.6 million increased 2.2% year over year. Europe, the Middle East and Africa generated revenues of $83.2 million, up 20.9%. Revenues from the Asia Pacific increased 25.3% to $17.8 million.
Sonos’ Margin Performance
Non-GAAP gross profit was $129.6 million, up 6% on a year-over-year basis. Non-GAAP gross margin contracted 110 basis points (bps) to 46%.
Adjusted operating expenses amounted to $136.5 million, up 1.1% year over year.
Non-GAAP research and development (R&D) expenses increased 2.1%. Non-GAAP general and administrative (G&A) expenses were down 2.3%. Non GAAP sales and marketing expenses increased 1.3%.
Sonos, Inc. Price and EPS Surprise
Sonos, Inc. price-eps-surprise | Sonos, Inc. Quote
Non-GAAP adjusted EBITDA totaled $1.7 million. The company’s second-quarter adjusted EBITDA was anticipated in the range from a loss of $18 million to a profit of $10 million.
Cash Flow & Liquidity
In the fiscal second quarter, Sonos used $65.4 million of cash from operations. Free cash flow used was $70.2 million, up from $65.2 million used in the same period last year.
As of March 28, cash and cash equivalents were $200.2 million compared with $312.5 million as of Dec. 27, 2026. SONO has no debt.
In the second quarter, the company spent $40 million on share repurchases. Sonos still has $65 million remaining under its current share repurchase authorization.
Sonos’ Guidance
For the third quarter of fiscal 2026, the company expects revenue in the range of $355 million to $375 million, indicating year-over-year growth of 3% to 9%, with 6% growth at the midpoint. This guidance implies a modest acceleration from the second quarter on a constant-currency basis, as foreign exchange is expected to have a negligible impact on third-quarter growth. The company also noted that there will be no revenue contribution from App Multi during the quarter, as its launch is planned for the fall. Momentum is expected to continue into the fourth quarter, supporting a stronger second-half performance and full-year growth in line with prior expectations.
Gross margin for the third quarter is projected to be between 42% and 44.5% on a GAAP basis, with non-GAAP gross margin approximately 150 basis points higher, both remaining roughly flat year over year at the midpoint. The company stated that rising memory cost inflation is expected to continue into the fourth quarter, likely putting further pressure on gross margins. As a result, second-half fiscal 2026 gross margins, both GAAP and non-GAAP, are expected to be somewhat lower than those recorded in the second half of fiscal 2025. Management emphasized ongoing mitigation efforts to address these industry headwinds while maintaining focus on driving revenue growth and profitability.
Operating expenses for the third quarter are projected to be between $150 million and $160 million on a GAAP basis, with non-GAAP operating expenses approximately $18 million lower and roughly flat sequentially at the midpoint. The company expects adjusted EBITDA in the range of $20 million to $48 million, translating to a margin of 5.6% to 12.7%.
The company remains focused on achieving sustainable revenue growth alongside improved profitability and disciplined reinvestment, with early benefits emerging from the adoption of AI to enhance productivity across multiple functions.
Sonos’ Zacks Rank
Sonos currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies
Badger Meter, Inc. (BMI - Free Report) reported earnings per share (EPS) of 93 cents for first-quarter 2026, which missed the Zacks Consensus Estimate by 22.5%. The bottom line compared unfavorably with the year-ago quarter’s EPS of $1.30.
Quarterly net sales were $202.3 million, down 9% from $222.2 million in the year-ago quarter due to delayed project deployments and weaker-than-expected short-cycle order activity. The Zacks Consensus Estimate was pegged at $230.1 million.
Fortive Corporation (FTV - Free Report) reported first-quarter 2026 adjusted EPS of 70 cents from continuing operations, which surpassed the Zacks Consensus Estimate of 64 cents. The bottom line increased 25.4% year over year.
Revenues increased 7.7% year over year to $1069.4 million. The top line beat the Zacks Consensus Estimate by 3.8%. Core revenues jumped 5.3%.
Sensata Technologies Holding plc (ST - Free Report) reported first-quarter 2026 adjusted EPS of 86 cents, up from 78 cents a year ago. The bottom line beat the Zacks Consensus Estimate by 2.4%.
Revenues for the quarter reached $934.8 million, up 2.6% from a year ago. The figure came near to the upper end of management’s expectations ($917-$937 million) and beat the consensus estimate by 0.7%. Strength Aerospace, Defense and Commercial Equipment segments drove the top-line performance.