SONO

Sonos is a quality balance sheet wrapped around a deteriorating P&L. Revenue has fallen four straight years (FY2022 $1.75B → FY2025 $1.44B, -4.9% in FY2025) and units sold dropped from 5,725K to 4,625K over three years, so this is volume decay, not just price/mix. The bottom line has crossed from a $159M profit in FY2021 to a widening loss streak — net loss of $61.1M in FY2025 (-4.2% margin) versus -$38.1M and -$10.3M prior, with diluted EPS at -$0.51 and ROE of -17.2%. On the GAAP numbers alone this is a melting ice cube.

But the cash story is far better than the income statement. Gross margin held at a healthy 43.7%, the company ran $137M of operating cash flow against only $28.7M of capex (≈$108M free cash flow), and management's own key metric — Adjusted EBITDA — actually rose to $132.3M (9.2% margin) from $107.9M, because the GAAP loss is heavy with non-cash D&A ($62.3M, +19%) and stock comp. The balance sheet is genuinely strong: $175M cash, no meaningful debt, a 1.43x current ratio, and liabilities/equity of just 1.32x. That cash generation is funding aggressive repurchases — $81M bought back in FY2025 and a fresh $150M program authorized Feb 2025 (shares purchased in the low-$13s, right where the stock sits), shrinking the count even as losses mount.