Sonos, Inc.

Sonos reported Q3 revenue of $375 million, up 9% year over year. Non-GAAP gross margin was 45.5%, non-GAAP gross profit was $171 million, and adjusted EBITDA was $44 million, up 24% year over year. GAAP gross profit was $189 million with a 50.4% gross margin, and GAAP EPS was $0.25 versus a loss of $0.03 a year ago; non-GAAP EPS was $0.27, up from $0.18. For Q4, Sonos guided revenue to $325 million to $355 million, GAAP gross margin to 39% to 41%, and adjusted EBITDA to negative $11 million to positive $18 million, with higher memory prices expected to be a $35 million headwind. For fiscal 2026, revenue is expected to grow 6% to 8% or 4% to 6% excluding the 53rd week, and adjusted EBITDA is expected to be $181 million, up 37% year over year.

Tom Conrad framed the quarter as evidence that Sonos has turned an inflection point, citing accelerating revenue growth, disciplined spending, and progress across his five growth dimensions: product innovation, customer advocacy, more intentional marketing, geo expansion, and emerging trends. He emphasized the company’s installed base of more than 53 million connected devices in more than 17 million homes and argued Sonos is well positioned for conversational computing and predictive intelligence in the home. His tone was optimistic and strategic, but he repeatedly acknowledged the memory-cost environment as a real, temporary headwind.

Saori Casey said Q3 performance was strong across revenue, margins, and cash generation, with revenue of $375 million, GAAP gross profit of $189 million, non-GAAP gross margin of 45.5%, adjusted EBITDA of $44 million, and free cash flow of $40 million. She detailed the tariff refunds, noting $24 million was received in Q3 from a $41 million claim, and highlighted a strong balance sheet with net cash and marketable securities of $261 million. She also said Sonos spent $30 million on buybacks in Q3, reducing shares by 2 million, and ended with $35 million remaining on its repurchase authorization. On outlook, she pointed to $58 million of full-year memory-cost pressure, Q4 revenue growth aided by an extra week of sales, and fiscal 2026 adjusted EBITDA of $181 million.

Analysts focused heavily on the memory-cost issue, asking whether engineering changes could reduce memory usage without a product refresh, how Amp Multi should be viewed from a margin standpoint, and what the September launch event would involve. Management said the memory-efficiency work can be introduced as running changes over time, without hurting product performance or future optionality, and that Amp Multi has excellent margins like other professional products. On the launch event and AI angle, Conrad said Sonos believes the value in home AI will be in the hardware, system, and connectivity around the model, not just the model itself, and that Sonos has spent 20 years building that operating environment. When pressed on 2027, Casey clarified that management is signaling momentum in growth, not necessarily explicit acceleration, and that current thinking implies non-GAAP gross margin around the low end of the Q4 range and relatively flat operating expense discipline.