Sonos Q4 2026: Revenue Beats but Memory Costs Squeeze Margins
As seen on the 24/7 Wall St. homepage on November 10, 2026.
Memory chips are now Sonos's biggest problem: $56 million of higher costs absorbed in fiscal 2026 pulled non-GAAP gross margin to 42.1% from 45.1%, and earnings missed expectations even as revenue rose about 20% year over year and topped estimates. Management says the component squeeze persists, with a fresh $150 million buyback and the Sonos 27 launch as the offsets.
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Sonos closed fiscal 2026 with quarterly revenue of $344.4 million, edging past the $340.3 million consensus estimate and rising about 20% year over year. CEO Tom Conrad pointed to growth in every region, five new product launches during the fiscal year, and the forthcoming Sonos 27 as evidence the company's system strategy is gaining traction.
Non-GAAP gross margin compressed to 42.1% in the quarter from 45.1% a year earlier, and adjusted EPS came in at $0.04, missing expectations of $0.05. The culprit was memory costs: Sonos absorbed $56 million in higher component expenses across fiscal 2026, a strain management attributed to AI and data center-driven semiconductor demand crowding out supply for consumer electronics makers.
GAAP figures carried a one-time lift that clouds the underlying picture. A Supreme Court ruling invalidating certain IEEPA tariffs triggered $18 million in refunds recognized in Q4, pushing reported gross margin to 46.1% for the quarter. Stripping those refunds out, as the non-GAAP figures do, makes the margin pressure considerably clearer.
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Management offered no formal guidance in the press release, saying it would address the outlook on the earnings call. What was announced: a new $150 million share repurchase program, authorized on November 10 after completing the prior $150 million program in Q4. For the full fiscal year, non-GAAP EPS reached $1.23 on revenue of roughly $1.55 billion, up about 7% year over year.
The quarterly earnings trajectory has been uneven. Sonos posted a strong $0.93 in Q1 2026, slipped to a $0.02 loss in Q2, recovered to $0.14 in Q3, and now lands at $0.04 to close the year. How quickly memory costs moderate will determine whether margins can reclaim ground lost this year.
Mentioned: SONO