NASDAQ$SONO

Sonos Inc · Q3 2021 earnings

Q3 2021 earnings · · Investor relations

Briefing

Sonos achieved record results driven by strong demand and successful execution.

Sonos reported record third quarter fiscal 2021 results with revenue increasing 52% year-over-year to $378.7 million. GAAP net income increased to $17.8 million, and GAAP diluted earnings per share increased to $0.12. The company raised its fiscal year 2021 outlook based on strong demand and profitability.

  • Revenue increased 52% year-over-year to $378.7 million.
  • GAAP net income increased to $17.8 million from ($57.0) million last year.
  • GAAP diluted earnings per share (EPS) increased to $0.12 from ($0.52) last year.
  • Gross margin increased 300 basis points to 47.0% from 44.0% last year.

Headline financials

Total Revenue

$379M

Previous: $249M+51.9%
EPS (adj)

$0.27

Previous: -$0.28+196.4%
Adjusted EBITDA margin

12.3%

No prior period
GAAP gross margin

47.0%

No prior period
Capital Expenditures

-$34.8M

Previous: -$29.9M-16.3%
Free Cash Flow

-$17M

Previous: -$86.9M+80.5%
Net Income

$17.8M

Previous: -$57M+131.3%
Operating Income

$16.7M

Previous: -$56.9M+129.4%
Gross Profit

$178M

Previous: $110M+62.0%
Cash & Equivalents

$671M

Previous: $329M+103.8%
Total Assets

$1.08B

Previous: $645M+68.2%
Stock-Based Comp

$15.5M

Previous: $15M+3.4%

Revenue & EPS history

Sonos · Revenue · Quarterly

$379M

Q3 2021+51.9%vs Q3 2020
Beat estimate in 11 of 15 quarters(73%)
ActualEstimate

Revenue by segment

Sonos · $379M total across 3 segments · Q3 2021

  • Sonos speakers
    $310M
  • Sonos system products
    $47.6M
  • Partner products and other revenue
    $20.8M

Forward guidance

Sonos raised its fiscal year 2021 outlook. Revenue is now expected to be in the range of $1.695 billion to $1.710 billion, representing growth of 28% to 29% year-over-year. Adjusted EBITDA is expected to be in the range of $270 million to $280 million, representing growth of 149% to 158%.

Tailwinds

  • Revenue increased to a range of $1.695 billion to $1.710 billion, representing growth in the range of 28% to 29% year-over-year.
  • Adjusted EBITDA increased to a range of $270 million to $280 million representing growth in the range of 149% to 158%.
  • Adjusted EBITDA margin increased to a range of 15.9% to 16.4%, representing a 770 to 820 basis point improvement year-over-year.
  • Gross margin increased to a range of 46.5% to 46.9%, representing a 340 to 380 basis point improvement year-over-year.
  • Fiscal 2021 gross margin outlook includes tariff refunds of $11 million and tariff expense of $9 million recognized through the third quarter fiscal 2021.

Headwinds

  • The duration and impact of the COVID- 19 pandemic and related mitigation efforts on our industry and our supply chain.
  • Supply chain challenges, including shipping and logistics challenges and significant limits on component supplies.
  • Changes in general economic or market conditions that could affect consumer income and overall consumer spending.
  • Our ability to successfully introduce new products and services and maintain or expand the success of our existing products.
  • Our ability to meet and accurately forecast product demand and manage any product availability delays.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2021

Historical avgQ3 2021

-0.5%

Avg return

Earnings day

-0.4%

Avg return

5 days after

-3.5%

Avg return

30 days after

51%

19 / 37 earnings

Positive

+29.5%

Q4 2020

Best reaction

-25.9%

Q2 2023

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q2 2026+1.0%+1.3%+9.3%
Q1 2026+6.4%+16.7%-2.5%
Q4 2025+1.5%+1.5%+16.7%
Q2 2025+9.7%+25.3%+11.9%
Q1 2025-7.5%-12.5%-14.1%
Q4 2024-2.2%-10.2%+3.6%
Q3 2024-5.4%-8.4%-6.9%
Q2 2024-5.8%-7.0%-11.2%
Q1 2024+21.8%+15.6%+20.2%
Q4 2023+18.0%+27.2%+51.1%
Q3 2023-7.8%-11.8%-16.1%
Q2 2023-25.9%-28.7%-27.5%
Q1 2023+11.9%+14.2%+3.0%
Q4 2022-2.5%-3.7%-1.5%
Q3 2022-22.3%-22.2%-27.1%
Q2 2022+4.4%+4.5%+2.0%
Q1 2022+4.7%+2.7%-9.7%
Q4 2021-4.3%-6.8%-14.0%
Q3 2021+6.2%+13.4%+5.0%
Q2 2021-3.0%-2.9%+1.3%
Q1 2021+13.1%+10.1%+28.9%
Q4 2020+29.5%+25.1%+42.0%
Q3 2020-13.6%-16.5%-20.7%
Q2 2020-1.3%+0.6%+14.0%
Q1 2020+8.0%-5.7%-28.2%
Q4 2019-2.0%+6.5%+2.2%
Q3 2019+8.8%+18.8%+48.0%
Q2 2019+4.0%+1.8%+3.3%
Q1 2018-13.5%-9.3%-19.3%
Q1 2019-17.1%-16.5%-24.2%
Q2 2018+4.5%+7.5%-15.6%
Q2 2017+4.5%+7.5%-15.6%
Q1 2016+4.5%+7.5%-15.6%
Q4 2018+10.8%-4.4%-18.2%
Q3 2018-19.2%-21.6%-38.0%
Q3 2017-19.2%-21.6%-38.0%
Q4 2017-19.2%-11.2%-28.8%

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