By Jorge Mercado Thursday, February 8th, 2024

Santa Barbara-based Sonos delivered a welcomed surprise to analysts on Feb. 6 when the company shared its results for the first quarter of 2024 and teased its new product launch — a process set to begin in the next few months.

Sonos, a maker of speakers and other products, announced revenue of $612.8 million and while that was down 9% from last year’s mark, it beat analysts’ expectations of $587 million, according to LSEG, formerly Refinitiv.

Moreover, Sonos reiterated it expects to generate $1.65 billion in revenue for the full year.

The company got $80.9 million in net income, or 64 cents per share, versus $75.2 million, or 57 cents per share, last year.

Adjusted for one-time losses, Sonos’ earnings per share reached 84 cents, beating analysts’ expectations of 54 cents per share, according to LSEG.

“Despite the challenging environment, we are winning in the market and outperforming the competition,” Sonos CEO Patrick Spence said during the company’s earnings call.

Spence also added that the team is just “months away” from announcing its highly-anticipated new product in a multi-billion dollar category, “which will be the first major milestone of our multi-year product cycle.”

“Our full attention is dedicated to successfully executing on our plan and positioning our business to return to top and bottom-line growth. Great things are happening here at Sonos and the best is yet to come,” Spence said.

He added that in anticipation of both the untapped opportunity in existing categories and opportunities in this new category, Sonos plans to expand its distribution footprint “meaningfully.”

“This means signing agreements with a few key distribution partners to broaden our reach and drive new households,” Spence said, adding more information will come in a few months. 

While not disclosed, all possibilities point toward Sonos finally unveiling a headphone product that it has been working on for years.

According to an email obtained by Bloomberg after the company’s Nov. 15 earnings report, Sonos Chief Product Officer Maxime Bouvat-Merlin disclosed that there is an internal team at Sonos working strictly on headphones. 

Bloomberg reported that Sonos is eyeing an April release for its headphones product, priced somewhere between $400-$500.

There are plans for other products such as earbuds, a TV-set top box and much more, Bloomberg reported.

Regardless, the excitement of a new product coupled with a solid earnings beat was more than enough to get investors excited.

Shares of Sonos shot up 12% in after-hours trading on Feb. 6 and closed even better on Feb. 7. One day after the company’s earnings report, Sonos shares closed up 17%, with the stock price at $19.28.

Based on five Wall Street analysts offering 12-month price targets for Sonos in the last 3 months, the average price target is $18.17 with a high forecast of $22.00 and a low forecast of $12.50, according to TipRanks. 

The company’s stock is also considered a strong buy based on the projections of those five analysts.
During the first quarter earnings call, Spence also welcomed his new CFO.

Former Apple finance executive Saori Casey is now Sonos’ new CFO effective Jan. 22, the Santa Barbara-based company announced Jan. 9.

Casey succeeds current CFO Eddie Lazarus, who will take on the new role of chief strategy officer while retaining his existing duties as chief legal officer. 

Casey has more than 30 years of corporate finance experience, including 13 years as Apple’s vice president of finance.

“The depth and breadth of her experience at world-class companies like Apple and Cisco make her perfectly suited to build on our momentum and seize the opportunity ahead,” he said in a press release.

Casey praised Sonos as an “iconic consumer brand with an exciting portfolio of audio products that delight and inspire millions of consumers around the world, myself included.

She said she has “great admiration for what the team has built and am energized by the opportunity to help lead Sonos into its next phase of growth.”

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