Sonos' Q1 Earnings & Revenues Surpass Estimates, Down Y/Y

Core Insights - Sonos, Inc. reported first-quarter fiscal 2025 non-GAAP earnings per share of 64 cents, down from 84 cents in the prior-year quarter, while GAAP earnings were 40 cents compared to 64 cents a year ago, exceeding the Zacks Consensus Estimate of 36 cents per share [1][2] Revenue Performance - Quarterly revenues decreased by 10.1% year over year to $550.9 million, within the company's guidance range of $480 million to $560 million, attributed to weaker demand and challenges from the 2024 app rollout [2] - Revenue from Sonos speakers was $467.1 million, down 7.1% year over year, surpassing the consensus estimate of $427 million [4] - System products revenue fell 28.7% year over year to $60.3 million, below the consensus estimate of $77 million [4] - Partner products and other revenues totaled $23.4 million, down 7.3% year over year, slightly above the consensus estimate of $22.9 million [4] - Region-wise, revenues from the Americas declined 17.3% to $324.6 million, while Europe, the Middle East, and Africa saw a 3% increase to $197.6 million, and Asia Pacific revenues rose 0.2% to $28.7 million [5] Margin and Expense Analysis - Non-GAAP gross profit was $246.1 million, down 13.4% year over year, with a non-GAAP gross margin contraction of 170 basis points to 44.7% [6] - Adjusted operating expenses were $193.3 million, down from $203 million in the prior-year quarter, while non-GAAP adjusted operating expenses were $169 million compared to $179.4 million a year ago [7] Cash Flow and Liquidity - Sonos generated $156.2 million in cash from operations, with a free cash outflow of $143.1 million, improved from $269.3 million in the previous year [9] - As of December 28, 2024, cash and cash equivalents were $280 million, up from $169.7 million as of September 28, 2024 [10] - The company returned $27 million to shareholders through stock repurchases in the fiscal first quarter, with $44 million remaining under the current buyback authorization [10] Future Guidance - Management expects second-quarter fiscal 2025 revenues to range between $240 million and $265 million, with GAAP gross margin anticipated between 42% and 44% and non-GAAP gross margin between 44% and 45.8% [11]