SONOS(US:SONO)2026-02-03 22:58Financial Performance - Total revenue for the three months ended December 27, 2025, was $545.662 million, a decrease of $5.2 million or 0.9% compared to the same period in 2024[101] - Net income for the same period was $93.798 million, resulting in a net income margin of 17.2%, up from 9.1% in the prior year[92] - Adjusted EBITDA for the three months ended December 27, 2025, was $132.139 million, with an Adjusted EBITDA margin of 24.2%, compared to 16.6% in the previous year[92] - The volume of products sold decreased by 3.1%, totaling 1.793 million units for the three months ended December 27, 2025[103] Revenue Breakdown - Revenue from Sonos speakers, which accounted for 84.2% of total revenue, decreased by 1.7% to $459.240 million[102] - Sonos system products revenue increased by 7.9% to $65.058 million, representing 11.9% of total revenue[102] - Revenue from Partner products and other sources decreased by 8.9% to $21.364 million, making up 3.9% of total revenue[102] - The Americas region saw a revenue increase of 1.3%, while EMEA and APAC regions experienced declines of 4.1% and 4.6%, respectively[104] Cost and Expenses - Cost of revenue decreased by $17.2 million, or 5.6%, to $292.2 million for the three months ended December 27, 2025, compared to $309.5 million for the same period in 2024[108] - Gross profit increased by $12.1 million, or 5.0%, to $253.5 million for the three months ended December 27, 2025, compared to $241.4 million for the same period in 2024[106] - Gross margin improved by 270 basis points to 46.5% for the three months ended December 27, 2025, compared to 43.8% for the same period in 2024[110] - Research and development expenses decreased by $21.1 million, or 26.1%, to $59.8 million for the three months ended December 27, 2025, compared to $80.8 million for the same period in 2024[114] - Sales and marketing expenses decreased by $21.4 million, or 24.7%, to $65.3 million for the three months ended December 27, 2025, compared to $86.6 million for the same period in 2024[116] - General and administrative expenses increased by $2.2 million, or 8.4%, to $28.0 million for the three months ended December 27, 2025, compared to $25.8 million for the same period in 2024[118] Cash Flow and Investments - Net cash provided by operating activities for the three months ended December 27, 2025, was $163.3 million, an increase from $156.2 million in the same period last year[130] - Cash used in investing activities was $4.1 million, primarily due to purchases of marketable securities of $12.5 million and property and equipment of $6.0 million, offset by maturities of marketable securities of $14.4 million[131] - Cash used in financing activities totaled $23.4 million, mainly for common stock repurchases of $25.0 million and tax-related stock repurchases of $10.9 million, partially offset by proceeds from stock options of $13.2 million[132] - The net increase in cash and cash equivalents for the period was $137.8 million, compared to $110.2 million in the prior year[129] - As of December 27, 2025, cash and cash equivalents totaled $312.5 million, including $195.7 million held by foreign subsidiaries[123] Foreign Exchange and Risk - The company recognized a foreign currency exchange gain of $0.4 million for the three months ended December 27, 2025, compared to a loss of $6.0 million in the same period last year[138] - A hypothetical adverse change of 10% in foreign currency exchange rates would have resulted in an adverse impact on income before taxes of approximately $9.2 million for the current quarter[138] - The company has not entered into any material foreign exchange contracts or derivatives to hedge foreign currency exposures, increasing its risk from exchange rate fluctuations[137] - The company’s international sales are primarily denominated in foreign currencies, which could impact revenue due to exchange rate movements, particularly with the euro and British pound[136] Strategic Initiatives - The company is focused on cost transformation initiatives, including workforce reductions of 6% in August 2024 and 12% in February 2025, to improve operational efficiency[87] - Future product introductions include the announcement of Amp Multi in January 2026, aimed at enhancing the Sonos platform's value and capabilities[86]