A month has gone by since the last earnings report for Sonos (SONO Quick QuoteSONO - Free Report) . Shares have added about 17.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Sonos due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Sonos' Reports Q2 Loss

Sonos 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.

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.

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.

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.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Sonos has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Sonos has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.