Company Sees Q2 Adjusted EBITDA Loss of $18M to Gain of $10M
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 5d ago
0mins
Should l Buy SONO?
Sees Q2 adjusted EBITDA loss of $18M to gain of $10M. Sees Q2 GAAP gross margin 44%-46%. Says expects revenue in the first half of FY26 to be $796M-$826M. Says gross margin guidance range embeds higher memory costs in Q2. Sees Q2 operating expenses $134M-$144M. Comments and guidance taken from Q1 earnings conference call.
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Analyst Views on SONO
Wall Street analysts forecast SONO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SONO is 19.67 USD with a low forecast of 17.00 USD and a high forecast of 21.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Analyst Rating
2 Buy
1 Hold
0 Sell
Moderate Buy
Current: 17.080
Low
17.00
Averages
19.67
High
21.00
Current: 17.080
Low
17.00
Averages
19.67
High
21.00
About SONO
Sonos, Inc., and its wholly owned subsidiaries designs, develops, manufactures, and sells audio products and services. It offers customers a proprietary software platform, and the ability to stream content from a variety of sources over the customer’s wireless network or over Bluetooth. Its product lineup includes wireless, portable, and home theater speakers, headphones, components, and accessories. Its products are sold through third-party physical retailers, including custom installers of home audio systems, e-commerce retailers, and its Website sonos.com. Its products include Era 100, Era 300, Five, Roam 2, Move 2, Ray, Beam (Gen 2), Arc, Sub Mini, and Sub (Gen 3). Its proprietary software includes multi-room, multi-service experience, open platform for content partners, and smart audio tuning. Its products are distributed in more than 60 countries through retailer's physical stores and their websites, online retailers, custom installers who bundle its products with their services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Sonos Q1 Earnings Beat Expectations, But R&D Budget Cut Significantly
- Earnings Beat: Sonos reported an adjusted EPS of $0.93 for Q1 2026, surpassing analyst expectations of $0.68, with sales reaching $546 million, indicating resilience in sales and profitability despite a 1% year-over-year decline.
- Cash Flow Improvement: The company's free cash flow increased by approximately 3% to $150.8 million, providing investor confidence even as it reported negative earnings for 2025, showcasing improved financial management.
- R&D Budget Cuts: Sonos significantly reduced its R&D spending by 26% year-over-year, which, while lowering costs, may negatively impact product competitiveness in the long term, especially as rivals increase their R&D investments.
- Positive Stock Reaction: Following the earnings report, Sonos's stock jumped 4.9%, reflecting market recognition of its profitability, although the potential risks from reduced R&D spending still loom, investors remain optimistic about the sustainability of its future cash flows.
See More
Sonos Q1 Earnings Beat Estimates, Stock Rises 4.9%
- Earnings Beat: Sonos reported an adjusted earnings per share of $0.93 for Q1 2026, surpassing analyst expectations of $0.68, with sales reaching $546 million, despite a 1% decline year-over-year, indicating effective cost management.
- Significant Cost Cuts: The company dramatically reduced R&D spending by 26% year-over-year and other operational costs, resulting in a nearly doubled GAAP profit per share to $0.75, although this may impact long-term product competitiveness.
- Improved Free Cash Flow: Free cash flow increased by about 3% to $150.8 million in Q1, reflecting strong cash flow management, even as the company reported negative earnings for the fourth consecutive year.
- Investment Value: Sonos stock is currently valued at 15 times free cash flow, making it more attractive after accounting for net cash, leading analysts to suggest that as long as cash flow remains strong, Sonos stock is a buy.
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US Stocks Waver Amid Mixed Earnings and Tech Rotation
- Market Fluctuations: The S&P 500 Index is up 0.08%, the Dow Jones Industrial Average is up 0.54%, while the Nasdaq 100 Index is down 0.56%, indicating the complexity of market sentiment amid mixed corporate earnings results.
- Divergent Corporate Performance: Super Micro Computer forecasts Q3 net sales of at least $12.3 billion, significantly above the $10.25 billion consensus, leading to a stock price increase of over 15%; conversely, Advanced Micro Devices' weak Q1 sales forecast results in a stock decline of over 13%, reflecting a reassessment of tech stocks.
- Labor Market Signals: The January ADP employment change rose by 22,000, below the expected 45,000, indicating weakness in the labor market that could influence future monetary policy decisions.
- Government Funding Plan: The funding package signed by President Trump extends funding for the Department of Homeland Security through February 13, while other departments are funded until September 30, alleviating concerns over a government shutdown and boosting investor confidence.
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Sonos Q1 2026 Earnings Call: Growth Strategy and Financial Performance
- Strong Financial Performance: Sonos reported Q1 revenue of $546 million, a 5% year-over-year increase, with adjusted EBITDA reaching $132 million, indicating robust growth potential driven by fiscal discipline and structural changes.
- New Product Driving Growth: The introduction of Sonos Amp Multi is seen as a clear expression of the company's system strategy, targeting installer partners to enable larger home audio projects, thereby enhancing market competitiveness.
- Accelerating Customer Growth: Following a price reduction, new customer growth for the Era 100 product exceeded 40%, marking a successful effort in attracting new users and expected to further enhance market share and brand loyalty.
- Optimistic Future Outlook: Management anticipates Q2 revenue between $250 million and $280 million; despite cost pressures, the launch of new products and market expansion are expected to drive accelerated revenue growth in the second half of the fiscal year.
See More
Sonos (SONO) Q1 2026 Earnings Call Transcript
See More
Sonos Q1 Earnings Exceed Expectations with Strong EPS Beat
- Strong Earnings Performance: Sonos reported a Q1 non-GAAP EPS of $0.93, beating expectations by $0.25, indicating robust profitability that may bolster investor confidence.
- Slight Revenue Decline: Revenue reached $545.66 million, down 0.9% year-over-year, yet it exceeded expectations by $8.74 million, demonstrating the company's resilience in maintaining market competitiveness despite challenges.
- Strategic Product Launch: After a significant pause for strategic reset, Sonos introduced a new product, reflecting the company's responsiveness to market demands and potentially laying the groundwork for future growth.
- Optimistic Market Outlook: Management's focus on enhancing product density suggests a commitment to optimizing the product mix, aiming to address competition and seize market opportunities moving forward.
See More
Sonos Q1 Earnings Beat Expectations, But R&D Budget Cut Significantly
- Earnings Beat: Sonos reported an adjusted EPS of $0.93 for Q1 2026, surpassing analyst expectations of $0.68, with sales reaching $546 million, indicating resilience in sales and profitability despite a 1% year-over-year decline.
- Cash Flow Improvement: The company's free cash flow increased by approximately 3% to $150.8 million, providing investor confidence even as it reported negative earnings for 2025, showcasing improved financial management.
- R&D Budget Cuts: Sonos significantly reduced its R&D spending by 26% year-over-year, which, while lowering costs, may negatively impact product competitiveness in the long term, especially as rivals increase their R&D investments.
- Positive Stock Reaction: Following the earnings report, Sonos's stock jumped 4.9%, reflecting market recognition of its profitability, although the potential risks from reduced R&D spending still loom, investors remain optimistic about the sustainability of its future cash flows.
See More
Sonos Q1 Earnings Beat Estimates, Stock Rises 4.9%
- Earnings Beat: Sonos reported an adjusted earnings per share of $0.93 for Q1 2026, surpassing analyst expectations of $0.68, with sales reaching $546 million, despite a 1% decline year-over-year, indicating effective cost management.
- Significant Cost Cuts: The company dramatically reduced R&D spending by 26% year-over-year and other operational costs, resulting in a nearly doubled GAAP profit per share to $0.75, although this may impact long-term product competitiveness.
- Improved Free Cash Flow: Free cash flow increased by about 3% to $150.8 million in Q1, reflecting strong cash flow management, even as the company reported negative earnings for the fourth consecutive year.
- Investment Value: Sonos stock is currently valued at 15 times free cash flow, making it more attractive after accounting for net cash, leading analysts to suggest that as long as cash flow remains strong, Sonos stock is a buy.
See More
US Stocks Waver Amid Mixed Earnings and Tech Rotation
- Market Fluctuations: The S&P 500 Index is up 0.08%, the Dow Jones Industrial Average is up 0.54%, while the Nasdaq 100 Index is down 0.56%, indicating the complexity of market sentiment amid mixed corporate earnings results.
- Divergent Corporate Performance: Super Micro Computer forecasts Q3 net sales of at least $12.3 billion, significantly above the $10.25 billion consensus, leading to a stock price increase of over 15%; conversely, Advanced Micro Devices' weak Q1 sales forecast results in a stock decline of over 13%, reflecting a reassessment of tech stocks.
- Labor Market Signals: The January ADP employment change rose by 22,000, below the expected 45,000, indicating weakness in the labor market that could influence future monetary policy decisions.
- Government Funding Plan: The funding package signed by President Trump extends funding for the Department of Homeland Security through February 13, while other departments are funded until September 30, alleviating concerns over a government shutdown and boosting investor confidence.
See More
Sonos Q1 2026 Earnings Call: Growth Strategy and Financial Performance
- Strong Financial Performance: Sonos reported Q1 revenue of $546 million, a 5% year-over-year increase, with adjusted EBITDA reaching $132 million, indicating robust growth potential driven by fiscal discipline and structural changes.
- New Product Driving Growth: The introduction of Sonos Amp Multi is seen as a clear expression of the company's system strategy, targeting installer partners to enable larger home audio projects, thereby enhancing market competitiveness.
- Accelerating Customer Growth: Following a price reduction, new customer growth for the Era 100 product exceeded 40%, marking a successful effort in attracting new users and expected to further enhance market share and brand loyalty.
- Optimistic Future Outlook: Management anticipates Q2 revenue between $250 million and $280 million; despite cost pressures, the launch of new products and market expansion are expected to drive accelerated revenue growth in the second half of the fiscal year.
See More
Sonos (SONO) Q1 2026 Earnings Call Transcript
See More
Sonos Q1 Earnings Exceed Expectations with Strong EPS Beat
- Strong Earnings Performance: Sonos reported a Q1 non-GAAP EPS of $0.93, beating expectations by $0.25, indicating robust profitability that may bolster investor confidence.
- Slight Revenue Decline: Revenue reached $545.66 million, down 0.9% year-over-year, yet it exceeded expectations by $8.74 million, demonstrating the company's resilience in maintaining market competitiveness despite challenges.
- Strategic Product Launch: After a significant pause for strategic reset, Sonos introduced a new product, reflecting the company's responsiveness to market demands and potentially laying the groundwork for future growth.
- Optimistic Market Outlook: Management's focus on enhancing product density suggests a commitment to optimizing the product mix, aiming to address competition and seize market opportunities moving forward.
See More
