Sonos’ second quarter results reflected a mix of operational discipline and external headwinds, as management cited cost controls and targeted product updates as primary factors behind the company’s performance. CEO Thomas Conrad attributed the quarter’s outcome to “tight focus on execution,” highlighting gains in U.S. home theater market share and ongoing expense reductions. Persistent category softness and tariff-related pressures continued to weigh on results, with Conrad acknowledging, “We lost the momentum in 2024. We’re starting to get it back, and we’re going to accelerate our pace from here.”
Is now the time to buy SONO? Find out in our full research report (it’s free).
Sonos (SONO) Q2 CY2025 Highlights:
- Revenue: $344.8 million vs analyst estimates of $324.7 million (13.2% year-on-year decline, 6.2% beat)
- Adjusted EPS: $0.19 vs analyst estimates of $0.15 (26.7% beat)
- Adjusted EBITDA: $35.59 million vs analyst estimates of $24.42 million (10.3% margin, 45.7% beat)
- Operating Margin: -0.8%, down from 3.2% in the same quarter last year
- Market Capitalization: $1.55 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Sonos’s Q2 Earnings Call
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Steven Bruce Frankel (Rosenblatt): Asked if software innovation will be as important as hardware for future product launches. CEO Thomas Conrad replied that while the cadence of hardware launches will remain steady, software upgrades allow faster differentiation and value creation for customers.
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Steven Bruce Frankel (Rosenblatt): Inquired whether cost reductions are largely complete or if further efficiencies are anticipated. CFO Saori Casey answered that transformation efforts continue and more cost savings are expected as restructuring fully materializes next year.
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Erik William Richard Woodring (Morgan Stanley): Sought clarity on how tariff-driven price increases will be decided across products. Conrad said each product’s pricing will be evaluated based on expected demand elasticity and competitive positioning.
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Erik William Richard Woodring (Morgan Stanley): Asked about broader market conditions and future demand. Conrad noted that while the category remains cyclically challenged, long-term trends in home entertainment and streaming are expected to benefit Sonos over time.
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Rayyana Wassim Matraji (Jefferies): Questioned the role of AI in Sonos’ product and platform roadmap. Conrad emphasized AI as a key part of both operational strategy and future customer experiences, aiming to make Sonos a defining player in home audio interaction.
Catalysts in Upcoming Quarters
In the coming quarters, our analyst team will be watching (1) how effectively Sonos executes its planned price increases in the face of higher tariffs, (2) whether cost optimization efforts continue to materialize as operating margin improvements, and (3) the pace of software-driven innovation and ecosystem expansion, particularly around AI features and platform integration. These milestones will be crucial in assessing Sonos’ ability to stabilize sales and return to growth in a challenging market environment.
Sonos currently trades at $12.84, up from $11.05 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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