Sonos Reports 13.2% Revenue Decline and Net Loss in Q3 Fiscal 2025

Sonos, Inc. reported a decline in financial performance for the third quarter of fiscal 2025, with total revenue of $344.8 million, down 13.2% from $397.1 million in the same period last year. For the nine months ending June 28, 2025, revenue also decreased by 8.5% to $1.16 billion compared to $1.26 billion in the prior year. The company experienced a net loss of $3.4 million for the quarter, contrasting with a net income of $3.7 million in the same quarter of the previous year. For the nine-month period, the net loss widened to $23.3 million from a profit of $14.9 million in the prior year.

The decline in revenue was attributed to several factors, including a decrease in demand for Sonos speakers and system products, which accounted for 73.6% and 21.2% of total revenue, respectively. The company noted that the previous year's launch of the Ace product had created a challenging comparison, and softer market conditions contributed to the downturn. Despite these challenges, Sonos introduced new products, including the Arc Ultra soundbar, which partially offset the decline in sales.

Operationally, Sonos has been undergoing significant restructuring efforts, including workforce reductions of approximately 12% in February 2025, aimed at optimizing costs and enhancing operational efficiency. The company reported a decrease in operating expenses by 14.7% for the quarter, totaling $152.7 million, down from $179.1 million a year earlier. This reduction was driven by lower research and development costs, as well as decreased sales and marketing expenses. The company also reported a decrease in gross profit margin, which fell to 43.4% from 48.3% in the prior year, primarily due to increased inventory-related write-downs and lower revenue.

In terms of cash flow, Sonos generated $133.9 million from operating activities in the nine months ended June 28, 2025, a decrease from $227.6 million in the same period last year. The company ended the quarter with cash and cash equivalents of $201.3 million, an increase from $169.7 million at the end of the previous fiscal year. Looking ahead, Sonos remains focused on its cost transformation initiative and expects to achieve approximately $20 million in savings during the remainder of fiscal 2025. The company is also evaluating its product roadmap and supply chain strategies to adapt to ongoing market conditions.