Sonos Reports 6% Revenue Decline in Q4 2023
2023-12-30
Sonos, a leading audio technology company, held its Q4 2023 Earnings Call to discuss its financial performance for the fourth quarter and fiscal year 2023. The call featured speakers such as Sonos CEO Patrick Spence and CFO and Chief Legal Officer Eddie Lazarus. During the call, several important business questions were addressed, shedding light on the company's strategies, financial results, and future outlook.
Sonos reported Q4 and fiscal 2023 revenue of $1.66 billion, representing a 6% year-over-year decline. However, excluding foreign exchange, the decline was only 3%. The company's adjusted EBITDA for the period was $154 million.
The call highlighted the enduring phenomenon of working from home and increased home consumption of video content as secular trends that will contribute to Sonos' long-term growth. The company aims to drive sustainable profitable growth in fiscal 2023 through a 7% reduction in force and a substantial reduction in real estate footprint. Sonos also launched new products, including the highly rated Move 2 speaker and the Era 100 and Era 300 speakers.
Sonos aims to expand its customer base and increase revenue per product sold. The company plans to convert single product households to the average multiproduct household install size, which represents a $6 billion revenue opportunity. Currently, Sonos has an average of 3.05 products per household.
In terms of market share, Sonos recorded its highest market share in the home theater category. The company differentiates itself from other consumer electronics companies by having a large and growing installed base of loyal customers who consistently purchase additional products to expand their Sonos system.
Looking ahead to fiscal 2024, Sonos expects revenue between $1.6 billion and $1.7 billion, effectively flat compared to fiscal 2023. The company aims to return to its annual target range GAAP gross margin of 45.5% and targets adjusted EBITDA of $165 million at the midpoint of guidance.
Sonos also provided insights into its capital allocation strategy, which includes organic investment, returning capital to shareholders, and opportunistic mergers and acquisitions. The company has more than $200 million in cash and no debt. Additionally, Sonos announced a new $200 million share repurchase program.
Overall, the Sonos Q4 2023 Earnings Call covered a range of important business topics, including financial performance, growth strategies, market share, and future outlook. The call provided investors and stakeholders with valuable insights into the company's operations and plans for the future.