Sonos earnings hindered by recent app problems
By Julia Staley
Special to the Business Times
Sonos’ quarter three results beat analyst estimates despite recent app glitches.
The Santa Barbara-based audio equipment manufacturer held its quarter three earnings call on Aug. 7, reporting company revenue at $397.1 million, a 6% year-over-year increase.
Sonos CEO Patrick Spence primarily attributed Sonos’ revenue growth to its recent Ace headphone product release.
Sonos Ace is the company’s first-ever headphone product launched on May 21 of this year.
The company reported a GAAP net income of $3.7 million, with GAAP diluted earnings per share of three cents. The company saw a loss of 18 cents in earnings per share during the same quarter last year.
Sonos’ adjusted net income was $29.5 million, with adjusted EPS of 23 cents.
This beat analyst expectations by 21.05%, with estimates valuing shares at 19 cents, according to Zack Consensus Estimate. Sonos had diluted EPS of 16 cents in the same quarter last year.
However, Sonos has been dealing with major glitches in its mobile app after an unsuccessful app redesign in April of this year.
Undetected bugs have negatively impacted customers’ in-app experience, lowering sales across the company’s portfolio.
These app glitches have offset the company’s quarter three revenue and led to revised fourth-quarter fiscal 2024 expectations.
“We will not rest until we’ve addressed the issues with our app and have delivered new versions that materially improve our customers’ experiences,” Spence said during the company’s earnings call.
Spence said Sonos will be primarily focused on addressing its app glitches, which will directly delay the release of two hardware products.
“The app situation has become a headwind to existing product sales, and we believe our focus needs to be addressing the app ahead of everything else,” Spence said.
“This means delaying the two major new product releases we had planned for Q4 until our app experience meets the level of quality that we, our customers and our partners expect from Sonos.”
Sonos’ stock value has steadily declined since April 2024.
Shares fell 6% to $11.97 on the day of the company’s quarter three earnings announcement.
Share value has remained steady since, closing at $11.73 on Aug. 13.
“While our app setback is regrettable, it is one chapter in our over 20 years of delighting customers,” Spence said.
“I speak for everyone at Sonos when I say that our number one priority is to make this right and ensure that the next chapter is even better than the previous ones.”
