Sonos posts $89.6 million profit, authorizes $150 million buyback

By Rebecca Stone

Sonos returned to annual revenue growth in fiscal 2026, generating $1.547 billion in sales and $89.6 million in net income, as its board authorized a new share-repurchase program of up to $150 million.

Revenue in the fiscal fourth quarter ended Oct. 3 rose 20% to $344.4 million, narrowing the net loss to $5.2 million, or $0.04 per diluted share, from $37.9 million, or $0.31 per share, a year earlier.

The quarter contained 14 weeks, and Sonos had said in August that the additional week would contribute about $24 million in sales. That estimate equaled roughly 7% of the $344.4 million result, which landed within the company’s $325 million to $355 million guidance range.

What shaped the fourth-quarter result?

Sonos’s GAAP results included $18 million in tariff refunds. Sonos received them after the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act, and the company excluded the refunds from its adjusted measures.

That distinction kept the legal refund out of Sonos’s adjusted performance measures. Adjusted EBITDA was unchanged at $6 million, while non-GAAP gross margin was 42.1%, even as the reported net loss narrowed sharply.

Quarter	Revenue	Gross profit	Net income (loss)	Diluted EPS
Q4 FY2025	$287.9M	$125.8M	($37.9M)	($0.31)
Q3 FY2026	$375.3M	$189.3M	$29.9M	$0.25
Q4 FY2026	$344.4M	$158.7M	($5.2M)	($0.04)

Q4 FY2026 revenue of $344.4 million trailed Q3 FY2026’s $375.3 million but remained above Q4 FY2025’s $287.9 million. Gross profit was $158.7 million in Q4, below Q3’s $189.3 million but above the year-ago quarter’s $125.8 million.

Profitability changed between the two quarters. Q3 produced $29.9 million of net income and $0.25 in diluted EPS; Q4 moved to a $5.2 million loss and negative $0.04, while Q4 FY2025 had lost $37.9 million, or $0.31 per share.

What changed across fiscal 2026?

Full-year revenue rose 7%, while non-GAAP operating expenses fell 3%. Adjusted EBITDA climbed 39% to $184 million, and free cash flow increased 14% to $123 million.

“We grew revenue 7%, reduced Non-GAAP operating expenses 3% and grew Adjusted EBITDA 39% to $184 million, all while absorbing $56 million of higher memory costs,” CFO Saori Casey said.

For a hardware company, the $56 million increase in memory costs was the clearest disclosed supply-chain pressure in the results. Sonos absorbed it while increasing adjusted EBITDA by 39% and reducing non-GAAP operating expenses by 3%.

Full-year net income of $89.6 million, or $0.73 per diluted share, contrasted with a $61.1 million loss in fiscal 2025. Free cash flow of $123 million exceeded net income by $33.4 million, providing a separate measure of cash generation for the annual turnaround.

CEO Tom Conrad said Sonos grew in every region and launched five new products during the year, providing the product and geographic detail behind the full-year recovery.

What does the buyback change?

Sonos repurchased 8.2 million shares for $130 million during fiscal 2026, including $35 million in the fourth quarter. It completed the prior $150 million program in the quarter, and the board authorized a new program of up to $150 million.

What comes next?

Sonos did not include an outlook in its release and said it would give guidance on the earnings call. The next test is whether five launches and growth across every region can sustain revenue while Sonos absorbs the $56 million increase in memory costs; its earnings call will supply forward guidance.