Sonos reported its strongest sales quarter ever around the holiday season with a record $562.1 million in revenue, up 13%. The company attributed the strong numbers to its promotional campaigns during the last three months of 2019. Even with a $20 million hit in the quarter due to the Chinese tariffs, Sonos’ gross margin increased to 40.5%. Excluding the impact of tariffs, its adjusted EBITDA hit 29%, or $113 million for the quarter.
“Revenue growth during the quarter was driven by our Sonos speaker and Sonos system products led by Move, One SL, Amp and Port. A record number of new homes started with Sonos during the first quarter, and we continued to see strong growth in product registrations by both existing and new customers,” says Patrick Spence, CEO.
He highlighted in a call to investors, in particular, the company’s IKEA partnership with its SYMFONISK product. Spence also said that despite strong competition entering the category that were offering holiday discounts, Sonos had increased its marketshare.
Brittany Bagley, CFO, told investors that sales of Sonos speakers, including the Play:1, Play:5, Sonos One SL, Playbar, Playbase sub and voice-enabled Sonos One, Move and Beam products, increased 7%.
Meanwhile, sales of Sonos system products rose 17% year-over-year for the Sonos Port, Amp and Boost.
Sonos for Business
Spence informed investors that the company is exploring opportunities in the commercial space.
“We’ve also started something called Sonos for Business, where we think there’s great opportunity to bring all the pillars of Sonos: the simplicity, the great sound, the freedom of choice to business customers as well,” says Spence.
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“So we’ve begun some experiments there. We believe there’s opportunity to bring new experiences to Sonos customers and get us into new Sonos customers by looking at other opportunities to bring services to the platform.
“I’m very proud of the fact that the team is looking at and spending time not just on where we’ve been traditionally, but also thinking beyond that and thinking in new areas where Sonos can go,” he added.