Sonos Inc. | $SONO Stock | Shares Tumble Toward Record Low After Poor Post-IPO Earnings


Sonos Inc. (NASDAQ: SONO)


Sonos, the smart speaker company that went public last month, is expected to have a rough day on Wall Street after revealing a higher-than-anticipated quarterly loss.

The company issued its third-quarter report late Monday, which failed to impress investors as losses widened from the year-ago quarter.

Shares of Sonos took a dip of 18% before the opening bell on Tuesday, wiping away the 13% gain they had accumulated in the regular trading session on Monday, as investors awaited the earnings report.

The stock was changing hands at $17.54 after slipping $3.70, or 17.42% at 11:00 a.m. in New York.

SONO Earnings & Outlook

Net loss for the quarter to June 30 fell to $27 million, or $0.45 per share, from a net loss of $0.26 per share during the third quarter of the previous year. After excluding special items, including a stock-based compensation of $10.3 million, the company came out with a loss of $1.5 million.

Revenue also dipped to $208.4 million from $223.1 million in the earlier-year period. Analysts polled by Thompson Reuters were expecting $208 million revenue.

Sonos expects to report adjusted earnings of between $59 million and $62 million for the full year. Its 2018 revenue estimate is in the range of $1.109 to $1.114 billion. Analysts are for full-year revenue of $1.112 billion, according to figures compiled by Thompson Reuters.

Sonos CEO Comments

Sonos CEO Patrick Spence had this to say in his letter to shareholders on Monday,

“Since our Q3 FY2018 results were at the high end of the preliminary ranges we provided in the Recent Developments section of our final prospectus filed in connection with the IPO, this quarter’s letter affords us a good opportunity to highlight our financial strategy and provide an update on our progress against our five key growth strategies. We are focused on driving sustainable, profitable growth for the long-term. We have grown our revenue for 12 consecutive years and scaled to nearly $1 billion in annual revenue with only approximately $110 million of primary capital raised since inception (pre-IPO).”

“We’ve done this by being long-term focused and responsible in how we invest. Given the nature of our business and the impact of seasonality and new product launches, we measure our financial progress on an annual basis, not a quarterly basis. We are focused on delivering a compound annual revenue growth rate of at least 10% and growing adjusted EBITDA at a compound annual growth rate of at least 20% over the coming years. We may not achieve these targets every fiscal year, but it is our long-term goal to do so.”

Sonos Inc. Company Profile

Sonos, Inc. provides multi-room wireless smart home sound systems. It supports approximately 100 streaming services around the world, providing customers with access to music, internet radio, podcasts, and audiobooks, with control from Android smartphones, iPhone, or iPad.

It has offices in Cambridge, Massachusetts, Hilversum, Netherlands, Shenzen, China, and Penang, Malaysia. The company was founded by Mai Trung, John MacFarlane, Craig A. Shelburne and Thomas S. Cullen in 2002 and is headquartered in Santa Barbara, California.  –CNNMoney