Sonos (SONO) is trading higher after the company beat fourth
quarter estimates and offered strong guidance for the fiscal first quarter and
2019 yesterday afternoon.
Sonos reported a small fourth quarter net loss with EBITDA up 350% to $20 mln and revenue up 27.5% to $249 mln.
Strong results came from success with the company's $400 Sonos Beam, a soundbar, voice-enabled smart speaker and music speaker with Amazon's Alexa. Beam captured the number one position by dollar share with 8% of the U.S. soundbar category in the third calendar quarter according to NPD, despite only being launched in mid-July. The company said the Beam is also doing well in the UK and Germany.
Fiscal 2018 was the thirteenth consecutive year of revenue growth for Sonos and the highest growth since 2014. Product sales were up 29% to 5 mln. Sonos added 1.5 mln new homes, 21% more than last year. What's more, 94% of the 21 mln Sonos products registered since 2005 are still in use today.
Management stresses focus on annual results, as product launches and seasonality can lead to lumpy and inconsistent quarters.
After an uninspiring first quarterly report in September, where revenue fell due to product mix and timing, guidance for fiscal 2019 was key.
Sonos guided for EBITDA +20-27% to $83-88 mln and revenue up 10-12% to $1.25-1.275 bln, both handily beating expectations.
Aside from the Beam, growth drivers for next year include a Sonos Amp, launching in Japan, a partnership with Ikea and adding Goggle Assistant alongside Alexa for voice control. The company also indicated that it will launch an outside the home product next year.
Sonos has a valuation just over $1.5 bln and trades at ~1.2x sales. The sales multiple is higher than that of Fitbit (FIT) and GoPro (GPRO) but lower than consumer electronics companies that have posted more consistent growth like Logitech (LOGI) and Garmin (GRMN).
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