Sonos Beats Earnings Expectations, Teases Out-of-Home Product for 2019
Sonos share prices rose sharply Thursday after the close of markets on better-than-expected earnings news: Investors sent the company’s stock up nearly 20 percent in after-hours trading after Sonos revealed that it nearly broke even in its fiscal fourth quarter, which ended on September 30, and surpassed $1 billion in revenue for its fiscal full year of 2018.
“2018 was a great year for us,” said Sonos CEO Patrick Spence during Thursday’s earnings call.
Sonos generated some $273 million in revenue during the last quarter, compared to $214.1 million during the same quarter a year ago. The company’s net loss for the quarter was $1.7 million, down from $14.9 million a year ago. This equals a loss of $0.02 per share. Analysts had expected revenue of $248.7 million, and losses of $0.10 per share.
The smart speaker maker saw a sales boost from its newly-introduced Sonos Beam soundbar, with executives writing in their investor letter Thursday that the Beam became the number 1 soundbar in the U.S. during that quarter measured in shares of dollar spent. That’s despite the fact that the soundbar only launched halfway into the quarter. “Beam exceeded our forecast,” the company said in its letter to investors.
Sonos also revealed its full-year totals Thursday, detailing that it sold products worth $1.14 billion during its fiscal 2018. This marks the first time the company surpassed $1 billion worth in revenue. The company’s net loss for the year was $15.6 million.
Over the 12 months ending September 30, Sonos sold more than 5 million products to consumers, adding 1.5 million homes to its customer base. What’s more, both revenue and household additions are accelerating significantly year-over-year, as the company illustrated in a chart:
The investor letter also previewed a number of initiatives that could add further growth. This includes the company’s partnership with Ikea, which will “potentially introduce millions of new households to the Sonos app and experience,” according to the letter.
What’s more, executives also used the letter to preview another significant opportunity for the company: sound outside of the home. From the letter:
“While approximately 50% of listening happens in the home, the other 50% happens outside the home. So, to be the leading sound experience company, we need to continue to offer differentiated listening experiences in the home while extending our platform and products to all the places and spaces our customers listen to the fantastic breadth of audio content available on demand today. In FY2019, we plan to push our boundaries by investing resources to make the experience of Sonos outside the home a reality.”
Sonos CEO Patrick Spence expanded on that opportunity during Thursday’s earnings call, saying that the company had ” several products that take us outside the home ” on its 3-year roadmap.
A first such product is expected to ship within the next 12 months, Spence said. He didn’t elaborate on the nature of these products, but it’s possible that the company could make a portable speaker, or partner with car makers to bring Sonos sound to the automotive space.
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