Sonos, Inc. SONO reported second-quarter fiscal 2025 non-GAAP loss per share of 18 cents, meeting the Zacks Consensus Estimate. It incurred a loss of 18 cents in the prior-year quarter as well. On a GAAP basis, the company reported a loss of 58 cents compared with a loss of 56 cents in the year-ago quarter. 

Quarterly revenues rose 3% year over year to $259.8 million. The figure came towards the high end of the company’s guidance of $240 million to $265 million. The uptick is driven by strong performance in Home Theater, led by the Arc Ultra, and its over-ear headphones, Ace, launched in June last year, partly offset by softer demand amid tough market conditions and forex pressure. The Zacks Consensus Estimate for the top line was pegged at $255.9 million.

The company’s performance was also boosted by ongoing investment in expanding its global footprint. Although growth markets currently make up a small portion of total revenues, they delivered double-digit growth in the quarter and the first half of the year, positively impacting overall revenues. Strengthening its presence in these regions is expected to be a major growth driver going forward.

In the past six months, shares have declined 37.4% against the Zacks Audio Video Production industry’s growth of 27.7%.

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Sonos’ Revenue Details

Revenues from Sonos speakers were $194.5 million, up 3.9% year over year. The consensus estimate was also pegged at $194.5 million.

Sonos’ system products’ revenues of $50.5 million grew 2.6% year over year. The consensus estimate was pegged at $60.3 million.

Revenues from Partner products and other totaled $14.7 million, down 8.9% year over year. The consensus estimate was pegged at $23.4 million.

Sonos, Inc. Price, Consensus and EPS Surprise

Sonos, Inc. price-consensus-eps-surprise-chart | Sonos, Inc. Quote

 

Region-wise, revenues from the Americas of $176.8 million increased 3.9% year over year. Europe, the Middle East and Africa generated revenues of $68.8 million, almost flat year over year. Revenues from the Asia Pacific rose 8% to $14.2 million.

Sonos’ Margin Performance

Non-GAAP gross profit was $122.3 million, up 7.6% on a year-over-year basis. Non-GAAP gross margin expanded 210 basis points to 47.1%, driven by reduced inventory reserves and improved cost efficiency.

Adjusted operating expenses amounted to $135 million, down 14% year over year and $5 million below guidance. This reflects savings from last quarter’s workforce reduction and other cost cuts. G&A expenses fell 32% due to lower headcount and cost cuts. R&D dropped 18% due to workforce reduction and roadmap changes. Sales & Marketing rose 1%, led by mixed factors.

Adjusted EBITDA loss totaled $1 million, beating the high end of guidance by $5 million, mainly due to reduced operating expenses, marking a $33 million improvement from the prior-year quarter.