Sonos (8SO) Q4 2026 Earnings Report

The call was strongly positive overall. Sonos returned to growth, delivered significant full-year profitability and free-cash-flow improvements, launched five products, expanded its installed base, and provided a growth outlook for fiscal 27. The principal challenges were elevated memory costs, substantial Q1 gross-margin pressure, higher inventory, negative Q4 free cash flow, and the need to improve direct-to-consumer execution.

For Q1, Sonos expects revenue to be in the range of $570 million to $630 million, representing a growth of 4% to 15% year over year, up 10% at the midpoint or 11% on a constant currency basis; the midpoint represents 74% growth from Q4, or 88% excluding the impact of q 4's extra week. Q1 GAAP gross margin is expected to be in the range of 36.4%, with non-GAAP gross margin approximately 90 basis points higher than GAAP, while memory and component costs are expected to be an approximately 1200 basis points year-over-year headwind and a stronger dollar a headwind of nearly 100 basis points to gross margin. GAAP operating expenses are expected to be in the range of $102 million to $162 million, non-GAAP operating expenses lower than GAAP by approximately $17 million, and adjusted EBITDA in the range of $73 million to $111 million, $92 million at the midpoint; without the impact of higher memory costs, adjusted EBITDA would have increased by 25% year-over-year to $165 million. Fiscal 27 is expected to be another year of revenue growth, with memory mitigation actions expected to deliver approximately 500 basis points of annualized gross margin improvement by the end of the year.