Shares of Sonos (SONO -1.16%) popped by as much as 13% this morning after the company reported fiscal third-quarter earnings. The results topped expectations and Sonos raised its guidance for the fiscal year. As of 11:15 a.m. EDT, the stock had given back some of those gains but was still up 5%.
Revenue in the fiscal third quarter increased 52% to $378.7 million, ahead of the consensus estimate of $315.2 million. That resulted in adjusted earnings per share of $0.27, which was much better than the $0.06 per share that Wall Street expected the audio technology company to lose on an adjusted basis.
"Our third quarter results represent yet another record-shattering quarter at Sonos," CEO Patrick Spence said in a statement. "We believe that the strong demand for our products is unwavering and underscores the uniqueness and power of our business model where customers start with one product and expand with more over time."
Sonos boosted its outlook for the fiscal year and now expects revenue to be in the range of $1.695 billion to $1.71 billion, up from a previous forecast of $1.625 billion to $1.675 billion in sales. This is the third consecutive quarter that Sonos has raised its guidance.
Adjusted EBITDA for fiscal 2021 should be $270 million to $280 million, and gross margin is expected to be 46.5% to 46.9%. The company's gross margin outlook includes $11 million in tariff refunds and assumes that tariff expenses will be minimal in the fiscal fourth quarter.