We use cookies to improve your experience, analyze site usage, and show relevant ads. Go to our Privacy Policy for details.
The call shows clear operational and commercial momentum: revenue growth, improving gross profit dollars, a return to positive adjusted EBITDA, strong regional performance (notably APAC and EMEA), successful new product launches with strong early reviews, and active capital allocation via buybacks. Key near-term headwinds are material: higher memory costs are expected to pressure gross margins through Q3 and into Q4, inventory has risen, free cash flow was negative for the quarter (seasonal), and tariff refund timing is uncertain. Management has a mitigation plan (supply actions, design optimizations, potential tariff refunds) and remains confident in growth execution, but margin pressure from memory inflation is the principal risk that tempers the outlook.
For Q3 Sonos guided revenue of $355–$375 million (up 3%–9% YoY, +6% at the midpoint) with negligible FX impact and no AMP Multi contribution, GAAP gross margin of 42.0%–44.5% (non‑GAAP about 150 bps higher) embedding an approximate 400‑bp year‑over‑year headwind from higher memory costs and no tariff‑refund benefit in Q3 (roughly 200 bps more headwind than Q2); GAAP operating expenses are expected to be $150–$160 million (non‑GAAP OPEX roughly $18 million lower than GAAP and about flat to Q2 at the midpoint); adjusted EBITDA is guided to $20–$48 million (5.6%–12.7% margin). Management said memory inflation is likely to rise into Q4, which should make 2026 GAAP and non‑GAAP gross margins somewhat below 2025 levels (2025: GAAP 43.5%, non‑GAAP 44.9%), while expecting continued momentum and a stronger second half.
Q2 revenue of $282 million, up ~8% year over year and near the top end of guidance; first half revenue up 2% year over year. Q3 revenue guidance of $355M–$375M (midpoint +6% YoY) indicates sequential acceleration.
GAAP gross profit of $125 million, up 10% YoY; non-GAAP gross profit $130 million, up 6% YoY. Q2 GAAP gross margin 44.3% and non-GAAP gross margin 46%.
Adjusted EBITDA was positive $2 million in Q2 (up $3M vs. -$1M prior year) and increased 48% on a reported basis; adjusted EBITDA margin improved ~510 basis points. Non-GAAP EPS improved to -$0.02 from -$0.18 a year ago.
APAC grew 25% YoY (constant currency +18%), EMEA grew 21% YoY (constant currency +9%), Americas grew 2% YoY (constant currency +1%). Strong demand for Era 100 and Arc Ultra; new products (Play and Aero 100 SL) launched with positive early reception.
Net cash balance of $249 million (includes $40M marketable securities). Repurchased $40 million of stock in Q2 (~2.5M shares, reducing share count by 2.1%) with $65M remaining authorization.
Launched Sonos Play to strong global press reviews and Aero 100 SL at a $189 MSRP to broaden entry points; AMP Multi scheduled for fall. Added Frank Barbieri as COO to consolidate partnerships, DTC, CRM and revenue systems. Management highlights AI adoption across internal operations.
Thank you for standing by. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sonos, Inc. second quarter fiscal 2026 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again.
Thank you. I would now like to turn the call over to Mr. James Baglanis, head of corporate finance. You may begin.
Good afternoon, and welcome to Sonos, Inc.'s second quarter fiscal 2026 earnings conference call. I am James Baglanis, and with me today are Sonos, Inc.'s CEO, Tom Conrad, CFO, Saori Casey, and chief legal officer, Eddie Lazarus. Before I hand it over to Tom, I would like to remind everyone that today's discussion will include forward-looking statements regarding future events and our future financial performance. These statements reflect our views as of today only and should not be considered as our views of any subsequent date. These statements are also subject to material risks and uncertainties that could cause actual results to differ materially from the expectations in the forward-looking statements. A discussion of these risk factors is fully detailed under the caption Risk Factors in our filings with the SEC. During this call, we will also refer to certain non-GAAP financial measures. For information regarding our non-GAAP financia...
