Sonos (SONO) investor relations material

Executive summary

• Q3 revenue reached $375 million, up 9% year-over-year, driven by new product launches and strong growth in EMEA and APAC regions.

• Adjusted EBITDA grew 24% year-over-year to $44 million, with margin at 11.7%, despite a $14 million headwind from higher memory costs.

• GAAP net income for the quarter was $30 million, a significant improvement from a net loss in the prior year.

• Non-GAAP EPS was $0.27, up 52% year-over-year; GAAP EPS was $0.25, including $0.20 from tariff refunds.

• $30 million was returned to shareholders via share repurchases, with 2 million shares repurchased in Q3.

Financial highlights

• Non-GAAP gross margin was 45.5%, near the top of guidance; GAAP gross margin was 50.4%, benefiting from $23 million in tariff refunds.

• Non-GAAP gross profit grew 11% year-over-year; GAAP gross profit was $189 million, up 26% year-over-year.

• Free cash flow was $40 million, up $8 million year-over-year, supported by tariff refunds.

• Cash and marketable securities totaled $261 million at quarter end.

• Operating expenses increased 3.4% for the quarter, with R&D spend growing slower than revenue.

Outlook and guidance

• Q4 revenue expected between $325 million-$355 million, up 13%-23% year-over-year, with an extra week contributing $24 million.

• Q4 non-GAAP gross margin expected to be about 120 basis points above GAAP margin of 39%-41%.

• Q4 adjusted EBITDA guidance is $-11 million to $18 million, with memory costs expected to reduce EBITDA by $35 million.

• Fiscal 2026 revenue growth expected at 6%-8% (4%-6% excluding extra week); adjusted EBITDA expected at $181 million, up 37% year-over-year.

• Management remains focused on operational efficiency, product innovation, and supply chain flexibility amid ongoing macroeconomic and geopolitical uncertainties.