Sonos 2025 Q3 Earnings Misses Targets with Net Income Plunge

Sonos reported Q3 2025 earnings on August 6, 2025. Revenue fell 13.2% year-over-year to $344.76 million, and the company swung to a net loss of $0.03 per share, down from a profit of $0.03 per share in the prior year. The stock price dipped 0.45% in the latest trading day, and the post-earnings trading strategy yielded poor returns.

Revenue
Sonos' Q3 revenue totaled $344.76 million, marking a 13.2% decline compared to $397.15 million in the same period last year. This performance was driven primarily by a downturn in Sonos speakers, which accounted for $253.67 million of the total. The segment for Sonos system products followed with $73.18 million, while partner products and other revenue contributed $17.92 million. The company's revenue across all segments reflects a challenging market dynamic, with the core speaker business bearing the brunt of the slowdown.

Earnings/Net Income
Sonos experienced a significant financial downturn, swinging to a loss of $0.03 per share in Q3 2025 from a profit of $0.03 per share in Q3 2024, representing a 200.0% negative change. The company reported a net loss of $-3.38 million, deteriorating from a net income of $3.71 million in the prior year. This represents a 191.1% decline in profitability. Despite this, the company has maintained profitability for eight consecutive years in the corresponding quarter, demonstrating resilience in the broader business context.

Price Action
The stock price of Sonos edged down 0.45% during the latest trading day and fell 3.16% over the most recent full trading week. However, the stock managed to gain 2.32% month-to-date, indicating some short-term recovery in investor sentiment.

Post-Earnings Price Action Review
The strategy of buying Sonos shares 30 days after the earnings release underperformed significantly over the past three years, yielding a -35.51% return. This contrasts sharply with the benchmark return of 47.44%, resulting in an excess return of -82.95%. The strategy also experienced a maximum drawdown of 0.00%, underscoring its inability to capitalize on gains and exposing investors to risk.

CEO Commentary
Tom Conrad, Sonos’ CEO, described Q3 as a “solid step forward,” emphasizing the company's return to its core values of craftsmanship, customer-first design, and innovation. He expressed confidence in the company’s long-term growth, citing a focused roadmap, a strong brand, and operational excellence as key enablers. CFO Saori Casey noted Q3 as another quarter of solid execution, with revenue above the high end of guidance and Adjusted EBITDA also at the high end of the range.

Guidance
The company plans to provide guidance during its Q3 Fiscal 2025 earnings call. However, the press release did not include specific quantitative guidance for revenue, EPS, or Adjusted EBITDA. CFO Saori Casey highlighted consistent execution on both the top and bottom lines but did not elaborate on future expectations beyond the need to “navigate a complex environment.”

Additional News
In the three weeks following Sonos’ Q3 earnings on August 6, 2025, the company focused on product promotions and customer engagement rather than major corporate developments. The company highlighted new speaker sets on its website, including the Three Room Set with Beam and 2 Play:1s, priced at €1,158, and the 3.1 Entertainment Set with Playbar, costing €1,598. These bundles aim to attract customers seeking comprehensive home audio systems. Sonos also introduced the Beam model at €449, reinforcing its position in the smart home audio market. While there were no notable M&A activities, C-level changes, or major buyback announcements, the company continued to emphasize product innovation and brand strength.