NASDAQ$SONO

Sonos Inc · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Revenue decreased slightly, but profitability was impacted by macroeconomic headwinds.

Sonos reported a slight decrease in revenue for Q3 2022, with a GAAP net loss compared to net income in the same quarter last year. The company is adjusting its FY22 outlook due to a challenging macroeconomic environment.

  • Revenue decreased by 1.8% year-over-year to $371.8 million.
  • GAAP net loss was $0.6 million, compared to a net income of $17.8 million last year.
  • GAAP diluted EPS was $0.00, compared to $0.12 last year.
  • Free cash flow was ($16.0) million.

Headline financials

Total Revenue

$372M

Previous: $379M-1.8%
EPS (adj)

$0.19

Previous: $0.27-29.6%
Adjusted EBITDA

$42.1M

No prior period
Adjusted EBITDA margin

11.3%

Previous: 12.3%-8.1%
GAAP gross margin

47.3%

Previous: 47.0%+0.6%
Capital Expenditures

-$24.9M

Previous: -$34.8M+28.3%
Free Cash Flow

-$25.5M

Previous: -$17M-50.6%
Net Income

-$597K

Previous: $17.8M-103.3%
Operating Income

$6.96M

Previous: $16.7M-58.4%
Gross Profit

$176M

Previous: $178M-1.1%
Cash & Equivalents

$440M

Previous: $671M-34.5%
Total Assets

$1.24B

Previous: $1.08B+14.7%

Revenue & EPS history

Sonos · Revenue · Quarterly

$372M

Q3 2022-1.8%vs Q3 2021
Beat estimate in 13 of 15 quarters(87%)
ActualEstimate

Revenue by segment

Sonos · $372M total across 3 segments · Q3 2022

  • Sonos speakers
    $314M+1.3%
  • Sonos system products
    $38.4M-19.4%
  • Partner products and other revenue
    $19.2M-7.7%

Forward guidance

Sonos expects revenue in the range of $1.730 billion to $1.755 billion, gross margin in the range of 45.7% to 45.9%, and adjusted EBITDA in the range of $215 million to $230 million for fiscal year 2022.

Tailwinds

  • Revenue growth of 1% to 2% from fiscal 2021.
  • Constant currency revenue growth of 4% to 5%.
  • Gross margin in the range of 45.7% to 45.9%.
  • Company remains confident that, when macroeconomic conditions normalize, they will return to double-digit revenue growth
  • Company expects to weather the current environment while operating from a position of strength

Headwinds

  • Revenue outlook lowered from previous range of $1.95 billion to $2.0 billion.
  • Adjusted EBITDA expected to decline 23% to 17% from fiscal 2021.
  • Adjusted EBITDA margin of 12.4% to 13.1%, compared to prior outlook range of 14.9% to 15.5%.
  • Uncertain macroeconomic backdrop is extending the timeline to achieve previously issued targets.
  • Macroeconomic backdrop become significantly more challenging

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 2022

Historical avgQ3 2022

-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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