Driven by Roam, Sonos Reports Strong Q3 Fiscal Numbers

Sonos has announced record Q3 results, and the popular audio company summarizes its strong numbers stating there is a high level of demand for its Roam, portable speaker and other products across its portfolio. 

According to Sonos, it is increasing its adjusted EBITDA and revenue outlook for the third time this year, reflecting its ability to capitalize on market tailwinds and execute on its long-term strategy to deliver sustainable growth. 

Sonos also increased its outlook for fiscal 2021 adjusted EBITDA to a range of $270 to $280 million, up from its prior range of $225 to $250 million, and increased revenue outlook to $1.695 to $1.71 billion compared to a prior outlook of $1.625 to $1.675 billion.

The company achieved a record third quarter adjusted EBITDA margin of 12.3% and recorded $379 million in revenue, up 52% from the prior year, and reports $55.9 million in free cash flow due to strong net income performance and working capital management. 

Sonos took a few unique approaches to expanding its brand as well, including a new partnership with Liverpool Football Club. The partnership builds on Sonos’ recent joint initiative with The North Face and newest product launch with IKEA.

Q3 Financial Highlights:

Here are some of the main areas Sonos highlights in its financial report for Q3:

EPS/Net Income

• Non-GAAP net income (loss) excluding stock-based compensation, restructuring and legal and transaction related fees increased to $38.7 million from ($11.6) million last year ahead of analyst estimates of ($22.7) million (First Call); GAAP net income (loss) increased to $17.8 million from ($57.0) million last year ahead of analyst estimates of ($31.5) million (First Call).
• Non-GAAP diluted earnings per share (EPS) excluding stock-based compensation, restructuring, and legal and transaction related fees increased to $0.27 from ($0.11) last year and ahead of analyst estimates of ($0.17) (First Call); GAAP diluted earnings per share (EPS) increased to $0.12 from ($0.52) last year ahead of analyst estimates of ($0.18) million (First Call).

Adjusted EBITDA

• Adjusted EBITDA increased to $46.7 million compared to ($2.7) million last year.
• Adjusted EBITDA margin expanded to 12.3% during the quarter compared to (1.10%) last year ahead of analyst estimates of 0.02% (First Call).

Gross Margin

• Gross margins reached 47.0%, an improvement of 300 basis points compared to last year.

Revenue

• Driven by interest in products such as the Roam, revenue in the quarter increased 52% to nearly $379 million compared to $249.3 million last year and ahead of analysts estimates of $313.6 million (First Call).

Fiscal Report:

• Through the strong launch of products like the Roam, total revenue for fiscal 2021 increased to $1.695 billion to $1.71 billion, representing growth of 28% to 29%. Excluding the 53rd week from fiscal 2020, this represents growth of 30% to 31% for the year
• Adjusted EBITDA increased to a range of $270 to $280 million representing growth in the range of 149% to 158% and ahead of analyst estimates of $235.6 million (First Call).
• Adjusted EBITDA margin increased to a range of 15.9% to 16.4%, representing a 770 to 820 basis point improvement year-over-year. 
• Gross margin was in the range of 46.5% to 46.9%, representing a 340 to 380 basis point improvement year-over-year and ahead of analyst estimates of 46.4% (First Call).