Sonos, Inc. (SONO Quick QuoteSONO - Free Report) reported third-quarter fiscal 2025 non-GAAP earnings per share (EPS) of 19 cents, meeting the Zacks Consensus Estimate. The company reported EPS of 23 cents in the prior-year quarter. On a GAAP basis, the company reported a loss of 3 cents against EPS of 3 cents in the year-ago quarter.

Quarterly revenues declined 13.2% year over year to $344.8 million. However, the figure came above the high end of the company’s guidance of $310 million to $340 million, fueled by stronger-than-anticipated sales of portables and components. The Zacks Consensus Estimate for the top line was pegged at $324 million.

Following the announcement, shares of the company have jumped around 6.2% in the pre-market trading session today. In the past year, shares have declined 6.2% against the Zacks Audio Video Production industry’s growth of 43.8%.

Image Source: Zacks Investment Research

Sonos’ Revenue Details

Revenues from Sonos speakers were $253.7 million, down 15.8% year over year.

Sonos’ system products’ revenues of $73.2 million fell 2.7% year over year.

Revenues from Partner products and other totaled $17.9 million, down 14.1% year over year.

Region-wise, revenues from the Americas of $229.7 million decreased 13.2% year over year. Europe, the Middle East and Africa generated revenues of $97.2 million, down 12.3% year over year. Revenues from the Asia Pacific decreased 17.4% to $17.9 million.

Sonos’ Margin Performance

Non-GAAP gross profit was $154.1 million, down 20.3% on a year-over-year basis. Non-GAAP gross margin contracted 400 basis points to 44.7%.

Adjusted operating expenses amounted to $131.1 million, down 15.4% year over year and approximately $9 million below the lower end of our guidance. On a normalized basis (mainly adjusting for variable compensation), non-GAAP operating expenses declined 23%, reflecting the full-quarter impact of the workforce reduction announced last quarter, along with continued benefits from various cost optimization initiatives implemented last summer.

Sonos, Inc. Price, Consensus and EPS Surprise

Sonos, Inc. price-consensus-eps-surprise-chart | Sonos, Inc. Quote

Research and development (R&D) expenses declined 17%, reflecting cost optimization measures implemented in the previous quarter. General and administrative (G&A) expenses were down 16%, primarily due to reductions in headcount and other cost-saving initiatives introduced last year. Sales and marketing expenses decreased 13%, largely due to elevated marketing spend in the prior year related to the launch of Ace.

Non-GAAP Adjusted EBITDA totaled $35.6 million, at the upper end of the company’s guidance of $12 million to $37 million, driven by higher revenue and reduced operating expenses.

Cash Flow & Liquidity

In the fiscal third quarter, Sonos had $37.4 million of cash from operations. Free cash flow was $32.7 million, down from $40.3 million reported in the same period last year.

As of June 28, cash and cash equivalents were $201.3 million compared with $173.2 million as of March 29, 2025. SONO has no debt.

In the third quarter, the company temporarily paused its share repurchase activities. However, returning capital to shareholders continues to be a fundamental aspect of its capital allocation strategy. Sonos has $150 million remaining under its current share repurchase authorization.

Sonos’ Fiscal Q4 Guidance

The outlook is based on current demand trends and assumes no major shifts in consumer spending despite the uncertain global trade environment. Management expects fourth-quarter revenues to range between $260 million and $290 million, implying a year-over-year increase of 2% to 14%.

For the fourth quarter, the company projects GAAP gross margin to be between 42% and 44%, and non-GAAP gross margin between 43.7% and 45.5%.

GAAP operating expenses are projected in the band of $150 million to $155 million, a 10% to 13% decline from $172 million in the same period a year ago. Non-GAAP operating expenses are expected to be between $130 million and $135 million, down 6% to 9% from $143 million last year, and roughly flat on a sequential basis.

Adjusted EBITDA is anticipated to range from a loss of $10 million to a gain of $14 million, suggesting a margin between -4% to 5%. This marks a notable improvement compared to a negative EBITDA $22.6 million in the fourth quarter of the prior year.

Sonos’ Zacks Rank

Sonos currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies

Sony Group Corporation (SONY Quick QuoteSONY - Free Report) reported first-quarter fiscal 2025 net income per share (on a GAAP basis) of ¥42.84, up from ¥34.37 in the year-ago quarter. Adjusted net income came in at ¥259 billion compared with ¥210.2 billion in the prior-year quarter.

Quarterly total revenues grew 2% year over year to ¥2,621.6 billion, driven by higher revenues in the Game & Network Services (G&NS) and Imaging & Sensing Solutions (I&SS) segments, partially offset by a decline in the Entertainment, Technology & Services (ET&S) segment.

Shares of SONY have gained 47.5% in the past year.

Dolby Laboratories, Inc. (DLB Quick QuoteDLB - Free Report) reported third-quarter fiscal 2025 non-GAAP EPS of 78 cents, surpassing the Zacks Consensus Estimate by 8.3%. It reported 71 cents in the prior-year quarter. Total revenues were $315.6 million, up from $288.8 million in the year-ago quarter and surpassing the Zacks Consensus Estimate by 3.9%. This uptick was driven by higher revenues in the Licensing segment and the Product and Services segment.

In the past six months, shares have lost 14.4%.

IMAX Corporation (IMAX Quick QuoteIMAX - Free Report) reported second-quarter 2025 adjusted earnings of 26 cents per share, which beat the Zacks Consensus Estimate by 36.84% and increased 44.4% year over year. Total revenues of $91.7 million beat the Zacks Consensus Estimate by 0.62% and increased 3.1% year over year.

In the past, shares of IMAX have gained 21.2%