Sonos Beats Q4 Estimates as EPS Hits $0.04 Against $0.18 Loss Forecast

Sonos reported quarterly earnings per share of $0.04 on Tuesday, beating the consensus estimate of a $0.18 loss by $0.22, according to FiscalAI. Revenue reached $344.44 million for the quarter, ahead of analysts' expectations of $340.33 million. The Santa Barbara-based wireless audio maker also posted a return on equity of 19.10% and a net margin of 3.82%.

The beat lands at a turning point for the company. On the conference call, management said Sonos returned to growth in fiscal 2026, with full-year revenue up 7% to $1.55 billion. Fourth-quarter revenue rose 20% year over year, or 11% excluding the extra week in the calendar. Growth spanned all three regions.

How Strong Was the Profitability Recovery?

Substantially stronger. Full-year adjusted EBITDA increased 39% to $184 million, while free cash flow rose 14% to $123 million. The company completed $130 million in share repurchases and authorized a new $150 million buyback program.

New product launches drove the fourth-quarter revenue climb, according to conference-call commentary. In a smaller demand signal, Sonos distributed audio was selected for a luxury Belgian estate, though the report did not disclose the deal's financial value.

What About the Memory-Cost Headwind?

Higher memory costs remain the sharpest pressure point. They cut fiscal 2026 adjusted EBITDA by $56 million, management said. For the first quarter, Sonos expects gross margin to fall approximately 1,000 basis points year over year, with memory and component costs contributing roughly 1,200 basis points of that pressure.

Coverage this week flagged the squeeze. If the costs persist, analysts warn, they could offset some of the benefit from rising sales.

What Comes Next for FY2027?

Management guided to fiscal 2027 revenue growth and first-quarter revenue of $570 million to $630 million, up 4% to 15% year over year. The company expects memory-cost mitigation to deliver about 500 basis points of annualized gross-margin improvement by the end of FY2027, while it keeps investing in new products, software and AI features.

How Did the Stock and Insiders React?

Shares traded down $0.12 on Tuesday, or 0.7%, to $16.89. Volume reached 2,168,012 shares, above the average of 1,758,741. The stock shows a fifty-day simple moving average of $16.74 and a 200-day average of $15.29. Its 52-week range runs from a low of $12.44 to a high of $19.82, and the market capitalization stands at $2.00 billion, with a price-to-earnings ratio of 37.53 and a beta of 1.94.

Insider activity drew attention as well. Director Karen Boone sold 46,766 shares on Friday, September 25th, at an average price of $18.13, for a total transaction of $847,867.58. Following the sale, Boone owned 69,271 shares valued at $1,255,883.23, a 40.30% decrease in her position. The transaction was disclosed in a Securities and Exchange Commission filing and was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 1.25% of the company's stock.

What Are Analysts Saying?

Several firms weighed in on SONO shares in recent months:

• Wall Street Zen lowered Sonos from a "strong-buy" rating to "buy" on Saturday, August 22nd.
• Weiss Ratings raised the stock from "hold (c)" to "hold (c+)" on Tuesday, October 13th.
• Rosenblatt Securities restated a "buy" rating and set a $21.00 price target on Thursday, July 30th.

Two analysts rate the stock a Buy and two a Hold. Based on MarketBeat.com data, the consensus rating sits at "Moderate Buy" with an average target price of $20.00.

The Bottom Line

Sonos closed fiscal 2026 with a return to growth, expanding profitability, a fresh $150 million buyback, and guidance calling for further revenue gains — but memory costs will keep squeezing gross margins for at least two more quarters before mitigation takes hold.